NRI Full Form

The term NRI stands for "Non-Resident Indian." They are Indian citizens who live outside of India for more than 182 days in a financial year. This term is commonly used to refer to Indian citizens who reside abroad, typically for work, education, or other personal reasons, and maintain strong ties to their Indian heritage and roots. Let us learn all about the term NRI in detail.

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What is NRI?

The full form of NRI is Non-Resident Indian. It is a term used to refer to an Indian citizen who resides outside of India for a period of 182 days or more in a financial year. NRIs maintain strong ties to India, including financial, cultural, and family connections.

About Non-Resident Indians (NRIs):

  • NRIs are citizens of India but do not hold dual citizenship status, as the Constitution of India does not allow Indian citizens to hold dual citizenship.

  • NRIs are an important part of the Indian economy and society. 

  • They contribute to India's GDP through remittances, investments in businesses, real estate purchases, and tourism. 

  • NRIs also play a vital role in promoting Indian culture and values abroad.

What is the Definition of NRI under the Income Tax Act 1961?

Under the Income Tax Act 1961, a Non-Resident Indian (NRI) is defined as an individual who is a citizen of India and who is not a resident of India.

  • Resident of India: A person is considered to be a resident of India if he or she satisfies any of the following conditions:

    • If he or she stays in India for more than 182 days in a financial year.

    • If he or she stays in India for more than 365 days in the past four years, including at least 60 days in the current financial year.

    • If he or she has an Indian domicile.

NRIs are taxed on their income earned in India. However, they are also eligible for a number of tax exemptions and deductions. For example, NRIs are exempt from tax on their income from foreign sources, such as salary, rental income, and capital gains.

Investment Plans for NRIsInvestment Plans for NRIs

Who is Non Resident Indian (NRI)?

The people living abroad are classified into three major categories, namely Non-resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs). 

Who are PIOs and OCIs?

  1. PIO (Person of Indian Origin)

    The Persons of Indian Origin (PIOs) is used to refer to foreign nationals of Indian origin. PIO status is held by those who are foreign nationals but have a connection in India, such as having held an Indian passport at any point in time, having Indian parents, or being married to a spouse who is an Indian citizen. PIOs (Persons of Indian Origin) are individuals with Indian ancestry or heritage, even if they may not hold an Indian passport.

  2. OCI (Overseas Citizen of India)

    OCIs, or Overseas Citizens of India, are individuals with roots in India who now live in foreign countries (excluding Pakistan and Bangladesh). They hold a lifetime visa and as of January 15, 2015, the PIO Card Scheme was withdrawn and merged with the OCI Card Scheme by the Government of India.

What are the Categories of NRI/ OCI/ PIO Accounts?

There are three main categories of NRI(Non Resident Indian), OCI (Overseas Citizen of India), and PIO (Person of Indian Origin) accounts, which are as follows:

  1. NRE

    • The full form of NRE is Non-Resident External. 

    • An NRE is an NRI/ OCI/ PIO who has an NRE account in India. 

    • An NRE account is a special type of bank account that allows NRIs to deposit and withdraw foreign currency, which is then converted to Indian rupees. 

    • The principal amount and interest earned on an NRE account are fully repatriable.

    • This means that you can be transferred back to the NRI's home country without any restrictions.

    • NRE accounts are a good option for NRIs who want to save their foreign earnings in India or who want to invest in India.

  2. NRO

    • The full form of NRO is Non-Resident Ordinary.

    • An NRO is an NRI, OCI, or PIO who has an NRO account in India.

    • An NRO account is a special type of bank account that allows NRIs to deposit and withdraw Indian rupees.

    • The principal amount and interest earned on an NRO account are also repatriable, but only up to a certain limit each year.

    • NRO accounts are a good option for NRIs who have income in India, such as rental income or pension income.

  3. FCNR

    • The full form of FCNR is Foreign Currency Non-Resident.

    • An FCNR is an NRI, OCI, PIO who has an FCNR account in India. 

    • An FCNR account is a special type of bank account that allows NRIs to deposit foreign currency and earn interest on it. 

    • The interest earned on an FCNR account is fully repatriable.

    • FCNR accounts are a good option for NRIs who want to save their foreign earnings in India and earn a higher interest rate than they would in their home country.

  4. Other Criteria to Classify NRI/ OCI/ PIOs:

    • Work-related NRIs: NRIs, OCIs, and PIOs stay outside India for work purposes. They may be employed by a multinational company, a foreign company, or the Indian government.

    • Study-related NRIs: These are NRIs staying outside India for study purposes. They may be studying at an undergraduate, postgraduate, or doctoral level.

    • Business-related NRIs: These are NRIs staying outside India for business purposes. They may be running their own business or working for an Indian company in a foreign country.

investment plans for nrisinvestment plans for nris

Who is Eligible for NRI Status?

Eligibility for NRI (Non-Resident Indian) status is determined primarily by an individual's physical presence in India during a financial year spanning from April 1st to March 31st. 

To qualify as an NRI, one must meet the eligibility criteria as mentioned in the table below:

Eligibility Criteria Details
Residency Period An individual must spend less than 182 days in India during a financial year to be considered an NRI. This is the standard benchmark for eligibility.
Global Income If an individual has income earned or accrued outside India, they may still qualify as an NRI even if they exceed the 182-day limit. This is typically the case for individuals who are posted abroad for employment.
Intent and Purpose An individual's intent and purpose for staying in India also play a role. If someone stays in India for personal reasons or vacation, they may still maintain NRI status if their primary residence and ties remain outside India.
Employment Abroad Those working abroad under specific employment contracts are also considered NRIs, provided they meet the other eligibility criteria.
Indian Passport Holding an Indian passport does not automatically confer resident status.

What are the Documents Required to Claim NRI status?

You need to prepare the following documents to claim the NRI status in India:

Document Required Purpose/Description
Passport Proof of Indian citizenship
Visa Indicates intention to stay abroad temporarily
Proof of Stay Abroad Establishes presence outside India for >182 days
Employment Proof Validates employment abroad (employment contracts, letters)
Income Proof Demonstrates foreign income sources (salary slips, tax returns)
Residential Proof Confirms overseas residence (rental agreements, utility bills)
Bank Account Details Information on NRI-specific bank accounts held abroad or in India
Self-Declaration Personal statement affirming NRI status

What are the Best Investment Plans in India for NRI/ OCI/ PIOs?

Let us have a quick look at some of the best investment options in India in 2023 for NRIs from the list below:

  • Unit Linked Insurance Plans (ULIPs): These are the investment plans that offer a combination of insurance and investment. NRIs, OCIs, and PIOs can earn high returns with investment in ULIP funds and also provide financial security to your family. NRIs can also avail of tax benefits under the IT Act, 1961, on investment in ULIPs through an NRE, NRO, or FCNR account.

  • Capital Guarantee Solution: These are the investment products that guarantee you to return the invested capital at the end of the policy term. Capital guarantee plans offer tax benefits under Section 80C of the Income Tax Act 1961.

  • Child Education Plans: These are the type of education plans specifically designed to help NRIs save for their child's education. It offers guaranteed payouts for the child's education, even if the policyholder dies during the policy term.

  • Fixed Deposits (FDs): FDs are a low-risk investment option that offers guaranteed returns. NRIs, PIOs, and OCIs can open an FD account in India through an NRE, NRO, or FCNR account. 

  • Mutual Funds (MFs): MFs are a diversified investment option that offers the potential for high returns. NRIs can invest in MFs in India through a Power of Attorney (POA) or an online trading platform.

  • National Pension Scheme (NPS): NPS is a government-backed retirement savings scheme that offers tax benefits and the flexibility to choose your investment mix. NRIs can open an NPS account in India through a POA or an online NRI portal.

  • Real Estate: Real estate can be a good investment for NRIs, PIOs, and OCIs, but it is important to research and invest in a reputable location. NRIs can buy real estate in India through a POA or a registered representative.

Investment Plans for NRIsInvestment Plans for NRIs

What are the Benefits of NRI Status?

Some of the benefits of NRI status are listed below:

  • Tax benefits: NRIs are exempt from paying Indian tax on their income earned outside India. They are also eligible for certain tax deductions on their income earned in India, such as interest earned on NRE and FCNR accounts and rent received from property in India.

  • Investment opportunities: NRIs have access to various investment opportunities in India, including real estate, stocks, and mutual funds. NRIs can also invest in government-backed schemes such as the National Pension Scheme (NPS) and the Public Provident Fund (PPF).

  • Banking facilities: NRIs can open and operate bank accounts in India. They can also send and receive money from India to other countries without any restrictions.

  • Visa benefits: NRIs are eligible for a 5-year multiple entry visa to India. They are also exempt from paying visa fees.

  • Other benefits: NRIs are eligible for other benefits such as:

    • Buying and owning property in India

    • Opening a business in India

    • Receiving government subsidies and scholarships

    • Enrolling their children in educational institutions in India

Wrapping It Up

NRIs are a vital and dynamic part of the Indian diaspora. They bridge the gap between their adopted countries and India, contributing to the nation's development and maintaining strong cultural ties. Being an NRI (Non-Resident Indian) offers a multitude of advantages, including financial opportunities, tax benefits, property ownership rights, and the ability to maintain cultural ties, all while embracing global opportunities and connections.


  • Who qualifies for NRI status?

    An Indian citizen who is staying outside India for more than 182 days in a financial year qualifies for NRI status.
  • Is NRI an Indian citizen?

    Yes, an NRI is an Indian citizen. NRI stands for Non-Resident Indian. It is a term used to refer to an Indian citizen who is residing outside India. NRIs may be staying outside India for various reasons, such as work, study, or business.
  • Who are NRI students?

    NRI students are Indian citizens who are studying outside India. They may be studying at an undergraduate, postgraduate, or doctoral level. NRI students may be studying in any country, but they are most common in the United States, the United Kingdom, Canada, and Australia.
  • What is the meaning of NRI holder?

    The term NRI holder is a reference to a person who holds NRI status in India. NRI stands for Non-Resident Indian. It is a term used to refer to an Indian citizen who is residing outside India.

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