Table of Content
Who Is an Indian Resident?
An Indian resident is an individual who is present in India for at least 182 days during a financial year, or who has resided in India for 365 days in the preceding four years and 60 days or more in the current year. This status is determined as per the Income Tax Act and affects one’s tax liabilities in India.
Who is a Non-Resident Indian (NRI)?
NRI stands for Non-Resident Indian and describes any Indian citizen who resides outside India for work, business, studies, or other reasons, for an indefinite period. An individual qualifies as an NRI if they spend over 182 days overseas in a financial year. This residency status is essential for determining tax responsibilities, investment rights, and banking access in India, and can also apply to those working abroad or serving on Indian ships
Who are PIOs and OCIs?
Persons of Indian Origin (PIOs) are foreign citizens (except those from Pakistan and Bangladesh) who previously held an Indian passport or whose parents or grandparents were Indian citizens. Overseas Citizens of India (OCIs) are foreign nationals of Indian origin who have been given lifelong visa and investment rights in India, merging most privileges earlier available to PIOs.
NRI Definition as per the Income Tax Act of India
As per the Income Tax Act, an individual is considered an NRI if they have not lived in India for 182 days or more in a financial year, or for less than 365 days in the four previous years and less than 60/120 days in the current year. For Indian citizens or PIOs with total Indian income over ₹15 lakh, the threshold becomes 120 days in a year.
Criteria Under FEMA
According to the Foreign Exchange Management Act (FEMA), an NRI is a citizen of India or a PIO who resides outside India for employment, business, or any vocation. FEMA defines residency based on the individual's intention and physical presence in India and is especially relevant for regulating foreign investments and banking.
Why Does the NRI Status Matter?
NRI status is vital because it determines tax liability, eligibility for investments, property ownership, and rights related to Indian financial products. It governs access to specific banking accounts (NRE, NRO, FCNR), income tax compliance, and other legal benefits for Indians living abroad.
Example of NRI
A software engineer who moved to the USA for employment and has lived there for the entire financial year while visiting India only for 30 days, remains an Indian citizen but qualifies as an NRI for tax and legal purposes in India.
How Can NRIs Get Insurance in India?
NRIs can buy insurance policies in India, including investment plans, from Indian insurers. They must complete standard KYC formalities, provide overseas residency proof, and may undergo medical checks, with some procedures allowed through telemedical or embassy-certified documents. Insurance benefits and regulatory rules are governed by IRDAI (Insurance Regulatory and Development Authority of India).
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