NRI and PIO are citizens of India who are working or residing in any foreign country. However, there is still confusion among people about the difference between NRI and PIOs. The major difference between NRI and PIO bank accounts is certain inclusions and exclusions provided under Indian laws.Read more
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PIOs are also eligible to open bank accounts and enjoy all the benefits that are provided under each NRI bank account as same as all the other NRIs. Both NRI and PIO have similar benefits, tax deductions, right to stay within the country, permission to visit etc.
A person who is not residing in India but comes under any one of the above-mentioned categories must know the difference between NRI and PIO for opening a bank account in India. Let us understand the difference between NRI and PIO is discussed in detail.
Indians who are residing in India for a minimum of 182 days in a year or 365 days in the last four years are known as residents of India.
Any Indian who does not meet these requirements; and live in any other foreign country are known as a Non-Resident Indian.
NRIs are eligible to open a bank account in India, buy properties in India but are restricted from some activities within India. These people must have Indian citizenship and Indian origin. NRIs are eligible to even vote during elections in India. Income earned by NRIs is not taxable in India.
Several financial institutions (that functions under the RBI) and some other banks in India offer the facility for opening an NRI account in India. Each NRI account provides facilities under Indian Tax Laws and other rules provided under Indian laws.
NRIs can stay outside of India for the following reasons:
Every bank offers different types of NRI accounts, which function under certain terms and conditions of the bank. These bank accounts can be opened by both NRIs and PIO cardholders who reside in any foreign country (except Bangladesh and Pakistan).
Each type of NRI account serves a unique purpose and is designed for providing a particular service to the account holder. These bank accounts are specifically made for helping NRIs despite the fact of them being in India or not.
Here is a rundown of the three types of NRI accounts in each bank:
The purpose of having this account is to save or maintain an income that has been earned in India. This account can maintain the income earned like – rents, dividends etc.
This account can be opened for maintaining funds that are from the foreign country in, which the NRI is residing. These foreign currencies will be converted to Indian rupees (INR) and saved in this NRE account.
These accounts can be maintained by NRIs or PIOs. They can deposit any foreign currency in this account. The currency should have been accepted under RBI’s rules.
Certain benefits are specific to NRI accounts and provide several specific benefits under each account. PIOs who own an NRI account are also eligible to enjoy all the benefits as an NRI. There isn’t much difference between NRI and PIO under this factor.
Some of the benefits of having an NRI account are listed below:
Persons of Indian Origin (PIO) are people who are Indian by birth or have a family of Indian Origin. People who are residing in other countries but own Indian citizenship and people who have an Indian parent or Indian grandparents are known as PIOs.
PIO cards can be issued for people under the above-mentioned categories. These PIO cardholders can stay in India for working, studying or even visit India for up to 15 years from the date of the card issued to them.
However, PIO cardholders must take permission from the Foreign Regional Registration Office for visiting certain restricted places within India.
Persons who are citizens of Bangladesh and Pakistan are excluded from being a PIO. Other than that, a person can be called a PIO if they have any one of the following qualifications:
Benefits of having a PIO card differ from being an NRI. Certain benefits are specified to a PIO cardholder. Benefits provided for a PIO cardholder cannot be given to anyone except them, even an NRI.
A PIO card provides certain benefits for the person who holds the card. The following are the major benefits that can be enjoyed by the cardholder in India:
The only difference between NRI and PIO is that NRIs are citizens or once residents of India who stay in a different country for more than 182 days (except Pakistan and Bangladesh).
However, a PIO cardholder is a person who is an Indian by birth or has an Indian descendent (parents or grandparents except being a citizen of Pakistan or Bangladesh) or even a spouse who is an Indian citizen.
The major difference between NRI and PIO are the inclusions and exclusions provided under each category. The basic difference between NRI and PIO, and other details are discussed in detail below:
Investment facilities are provided for both NRIs and PIO cardholders in India. The following are the additional facilities that are available for foreign investors:
Deposits are a mode of investment that can be made under bank accounts that are available for NRIs and PIO card holders like NRE account, FCNR account and NRO account.
Repatriation of around 1 million USD per year from an NRO account is subject to Income tax deductions.
Investments can be made on a repatriation basis like the FDI, Treasury bills, Domestic mutual funds, Bonds etc.
Investments can also be made on a non-repatriation basis like the Money market mutual funds in India, Chit Funds, Postal savings etc.
Investments can be made on immovable properties other than farmhouses or agricultural properties.
There is no permission required for transmitting an Inheritance to a legal heir of the property.
NRIs and PIO cardholders can get housing loans for purchasing any property in India.
Non-Resident Indians (NRIs) and Persons of Indian Origins (PIOs) both have different banking and investment needs. It is the responsibility of each bank for meeting the customer’s needs whether they are residing within India or abroad.
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*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply.
“Tax benefit is subject to changes in tax laws. Standard T&C apply.”
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