Who is a Non-Resident Indian or NRI?

In terms of Regulation 2 of FEMA Notification No.13 dated May 3, 2000, Non-Resident Indian (NRI) means a person resident outside India who is a citizen of India. Person of Indian Origin (PIO) means a citizen of any country other than Bangladesh or Pakistan who had (a) at any time held Indian passport or (b) he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 or (c) the person is a spouse of an Indian citizen or a person referred to in (a) or (b).

Clarification : It has been clarified in the Exchange Control Manual (ECM) that Indian Citizens who proceed abroad for business visits, medical treatment, study which do not indicate their intention to stay outside in India for an indefinite period will be considered as “person resident in India” during their temporary absence from India.Persons posted in U.N. Organisations and Officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-residents. Non –Resident foreign citizens of Indian Origin are treated on par with non-resident Indian Citizens (NRIs) for the purpose of certain facilities.

Section 2 (q)of FEMA 1999 states that “person resident outside India” means a person who is not resident in India . Thus the term “non-resident” is synonymous with the term, “person resident outside India”.

A ‘person resident outside India’* is defined in Section 2(v) of FEMA, 1999 as a person residing outside India for more than one hundred and eighty-two days (182 days) during the course of the preceding financial year but does not include-

A person who has gone out of India or who stays outside India, in either case-

(i)            For or on taking up employment outside India, or

(ii)   For carrying on outside India a business or vocation outside India, or

(iii)  For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;

* Section 2 (q)of FEMA 1999 states that “person resident outside India” means a person who is not resident in India . Thus the term “non-resident” is synonymous with the term, “person resident outside India”.

Clarification : It has been clarified in the Exchange Control Manual (ECM) that Indian Citizens who proceed abroad for business visits, medical treatment, study which do not indicate their intention to stay outside in India for an indefinite period will be considered as “person resident in India” during their temporary absence from India. Persons posted in U.N. Organisations and Officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-residents. Non –Resident foreign citizens of Indian Origin are treated on par with non-resident Indian Citizens (NRIs) for the purpose of certain facilities.

Income Tax Act has not directly defined NRI.As per provisions of income tax rules, an Individual who fulfills any of the following conditions mentioned in section 6(1) is deemed as RESIDENT of India.

(a) If he is in India during the relevant previous year for a period amounting in all or in aggregate to 182 days or more.

Or

(b) If he was in India for a period or periods amounting in all to 365 days or more during the four years preceding the relevant previous year

Anyone who does not meet the above criteria is Non-Resident.

Related article: Overseas citizen of India (OCI) and Person of Indian Origin (PIO)