NRI

Who is an NRI? Here’s All You Need to Know


An NRI, or Non-Resident Indian, is an Indian citizen who lives or works abroad.

According to the Foreign Exchange Management Act (FEMA), an NRI is limited to the tax status of an Indian citizen who is living abroad and can also be a Person of Indian Origin (PIO).

To qualify as an NRI, an individual must have lived outside India for over 182 days in the preceding financial year. This does not include those who are on a visit to India.

Under the Income Tax Act, a person is considered an NRI if their taxable Indian income exceeds ₹15 Lakhs for a calendar year and the person has lived in India for at least 120 days in the previous calendar year.

Additionally, a person may qualify as an NRI if the total Indian taxable income is not more than ₹15 Lakhs but the stay in India does not exceed 181 days.

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NRIs are subject to different taxation rules than ordinary Indian residents.

For example, income earned by NRIs outside India is not liable for tax, but the source of income from investments in India is liable for tax.

Furthermore, under the Foreign Exchange Management Act (FEMA), NRI funds have played a major role in training, recruiting, and retaining bright scientists in US agriculture.

NRI accounts offer many benefits such as top-performing plans with high returns, zero long-term capital gains tax, compared to 10% in mutual funds, and guaranteed tax savings under sections 80C and 10(10D).

All savings are provided by the insurer as per the IRDAI-approved insurance plan.

In order to open an NRI account, ID proof such as a photocopy of a valid passport, a copy of Permanent Account Number (PAN) or Form 60 (in absence of PAN), proof of NRI status such as a copy of valid visa/work permit/Overseas Resident Card, and address proof are required.

To sum up, an NRI is an Indian citizen who resides in a foreign country for more than one hundred and eighty-three days in a financial year for employment or business.

They are subject to different taxation rules than ordinary Indian residents and can benefit from the various insurance policies offered by insurers in India.

When does an NRI lose his status after returning to India?

When an NRI returns to India permanently, their NRI status is lost depending on the total time they spend in India during the year of their return. If an NRI returns after October in a given fiscal year, they can still qualify as an NRI for that year as they will be staying for less than 182 days in India.

However, if they return before October, they would lose the NRI status in the same year.

After losing the NRI status, returning NRIs either become resident but not ordinarily resident (RNOR), or resident and ordinarily resident (ROR) Indians. RNOR is essentially a transitional residential status given to returning NRIs before they become an ordinary resident of India (ROR).

To qualify as an RNOR Indian, they should have been an NRI in 9 out of 10 years preceding the fiscal year under consideration, or they should have been in India for no more than 729 days during the preceding seven years, or they should not be a tax-resident in any other country, and their Indian Income should exceed Rs 15 lakh in the previous year with their stay in India ranging from 120 days to 181 days that year.

If none of the conditions are met, then the NRI would directly become an ordinary resident and all their global income will be taxed in India as per the Income Tax Act, 1961.

The responsibility of informing banks about their return to India lies with the returning NRI.

The Reserve Bank of India says that NRIs moving back to India must inform their banks about the change in their residential status within a reasonable period of time.


I'm an Entrepreneur, Blogger & Mentor. Having lived in the USA for almost 7 years, I got bored and returned back to India. While doing so, created this website as a way to curate and journal my experiences. Today, it's a movement with a large community behind it. I hope this website helps NRIs planning to move back to India, make their transition smooth and easy. Feel free to ask any questions you may have. Happy to help!

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