Chat on WhatsApp
Quick Support & Updates
By Vipul Jain
Plenty of people are still confused about the NRI's full form and its meaning. So when we talk about the term NRI then it stands for non-resident Indians. NRI is a contraction and is used in several contexts. Including taxation, legal documentation, and more in India. So if you want to know more about this then now you have landed at the perfect blog post. Here we will lighten up NRIs and discuss more about it. Let’s start with what NRI is and understand this terminology.
When we shed light on NRI then this term is an abbreviation of non-resident Indians. Alongside it refers to persons of Indian origin who reside outside more than 182 days in the financial year. In other words, we can say that the NRI belongs to those people who were born in India and moved to other countries for different purposes. Including educational, job, resident, and more. Additionally, it is also important for banking, taxation, and investment purposes.
If we talk about an income tax act in India then it clarifies NRI based on their presence during the financial year in India. This act says that every single person needs to stay in another country for more than 182 days to become an NRI.
Foreign Exchange Management Act (FEMA) is another rule made for Indian citizens who stay abroad. If the person resides outside India for studies, employment, business, or any other reason then he or she will be considered as an NRI according to this act.
Next, we will explain the status of NRI which will help you to get more familiar with this term and get some legal knowledge related to NRI bank accounts and status.
When we talk about an NRI status then it offers specific responsibilities. This mainly affects your tax liabilities and handles different types of bank transactions. Helps to access bank services and enables you to make investments.
There are plenty of benefits to attaining NRI status and one of the most vital advantages is related to taxation. If you are an NRI and have an earning source outside India then the hard-earned money by you will be tax-free. However, if you also have some sources to earn in India then it is necessary to pay taxes and do planning for tax management carefully.
Some banking provisions are open and designed for NRIs. including NRE (Non-Resident External), NRO (Non-Resident Ordinary), and FCNR (Foreign Currency Non-Residential accounts). By using these accounts you can manage your income earned in India or abroad efficiently.
To get all the benefits you need to maintain your NRI status on a priority basis. Otherwise, if there is any change in your residency, staying in India for more than 182 days in a financial year can send your status back to resident India.
So above we discussed who is NRI and their status. In the next part of this blog, we will check out how to become an NRI.
To become an NRI it is essential to stay abroad for more than 182 days during the financial year. According to the Income Tax Act of India, it says that to become an NRI you must need to stay more than half a year to get an NRI card.
Aside from this, there are several reasons that help Indians to become NRIs. Including higher education, OCI employment, business, and more. These are the points to consider that enable Indians to stay longer abroad and become an NRI.
Now it's time to learn about the various types or we can say the categories of NRI and its terminology.
Expert NRI application services to manage your global financial, legal, and personal needs with ease and efficiency through Visament.
Contact US
When we talk about an Indian diaspora then it is divided into three categories. Including Non-Resident Indians (NRI), Persons of Indian Origin (PIO), and Overseas Citizens of India (OCI). knowing all the categories is essential, so next we will shed light on the types of NRI.
The full form of NRI is non-resident Indian; they are those citizens who live abroad for different purposes. They should be researchers in Europe, working professionals in Silicon Valley, students in Australia, and more. When we talk about the key factor in their residency then they should live in India for less than 182 days during the financial year.
Another type of NRI category is PIO which stands for person of Indian origin. It belongs to those citizens who hold foreign passports and have roots in India including historical, cultural, or familial ones. It includes those UK citizens born to Indian parents or third-generation Indians in SA and whose grandparents moved there are come under PIOs
This category represents individuals holding foreign passports but having historical, cultural, or familial roots in India. A third-generation Indian in South Africa whose grandparents migrated there, or a UK citizen born to Indian parents, could be considered PIOs.
Foreign people who have once been to India or who have family in India. They are allowed to have dual citizenship. Let’s understand through one example: if you are a former citizen of India and acquired Canadian citizenship after the 1950 Indian constitution commencement then you are an OCI.
These are the categories of NRI no matter whether it is PIO or OCI each one has some specific privileges, rules, rights, and obligations in India. Property ownership, legal responsibilities, and investments are some of the special realms.
Therefore understanding all the types of NRI is necessary for Indians residing overseas. And individuals of Indian origin. It is because of the impact on their relationship with India.
Read Also:- Why NRIs in the UK Need BRP (Biometric Residence Permit)
No matter if you are an NRI or not, every citizen needs a bank account nowadays. So if you are a non-resident Indian then you can open three types of bank accounts in India. Including NRE (Non-Resident External), NRO (Non-Resident Ordinary), and FCNR (Foreign Currency Non-Residents). Each type of bank account has its benefits. For example, they offer tax exemptions and free remittance of funds, and you will be able to hold funds in foreign currency.
These are the types of NRI bank accounts now we will move towards the factors that can affect NRI.
There are several factors that can impact on NRI status. The primary factor behind this is the number of days any individual stays in India during the fiscal year. Let’s explore all the reasons or we can say each factor and gain a comprehensive understanding.
One of the most vital factors affecting NRI status is duration of stay.
If you stay in India for 182 or more days then it is typical to qualify as an Indian resident rather than NRI.
Every individual has some purpose to stay abroad and it also plays a significant role. No matter what the reason is whether it is for employment, education, business, or any other. All the factors behind staying abroad indicate the period of time and the nature of their stay contributes to their NRI status.
When we discuss the factors then it is one of the critical ones among all. If you have an intention to settle in India permanently despite staying abroad for a prolonged period, your NRI status may be affected.
some countries enable dual residency. It means any citizen can stay in India and another country simultaneously. But if you want to stay in two countries then it is essential to follow some specific rules and regulations of both countries.
This rule for both countries can have an impact on NRI status. Every single country has its own criteria that determine tax residency. Like physical presence, citizenship, or permanent residence. So to ensure compliance between India and another country it is essential to understand the tax laws and bilateral agreements.
Above we discussed the factors affecting NRI status. After knowing these factors NRIs can smartly plan their taxation, finances, and legal obligations that ensure a smooth transition between resident and NRI status. Now we will check out the benefits and challenges of being an NRI.
There are plenty of benefits that you can avail as an NRI. including bank accounts in India, investing in stock or in property, and many more. Let's shed light on the advantages of being an NRI.
It is one of the greatest advantages of being an NRI. citizens can immerse themself in different cultures. Such as customs, traditions, and many more. Besides, if you are staying in foreign countries for studies then it is a golden chance for you to interact with students from various backgrounds and more.
When we talk about the benefits of being an NRI then it is one of the finest advantages. There are many career opportunities unlocked for an NRI including international jobs, industry advancement, and a diverse talent pool. With these benefits, citizens can easily accelerate their professional growth.
Another big advantage to becoming an NRI is that they can enjoy financial benefits. Including higher income, good exchange rates, and more opportunities to save money. If you are earning in a strong currency then it is good for your financial stability and NRIs can build a stronger financial foundation. Alongside non-resident Indians get some tax advantages and investment options that optimize financial planning.
If you are an NRI then access to quality education is one of the finest benefits for you. You will be able to access world-class education. No matter if you are pursuing graduation or still in school, you can choose renowned universities globally.
These are the some benefits of being an NRI including financial stability, cultural connections, and many more. Now it's time to see the challenges to be faced with being an NRI.
There are many significant benefits for NRI, but they also have to face several challenges. Like managing financial assets in India, navigating complex tax regulations, and maintaining the NRI status according to the prescribed rules. Now it's time to learn the challenges to become familiar with them.
Shifting to a new place, staying away from the family, and more are some of the worst moments and it is one of the biggest challenges for NRIs. adopting different cultures, ways of life, social norms, etc can be overwhelming and leads them to homesickness.
What if when you reach home after spending long hours in the office or somewhere you then have to manage all things alone? Yeah, it's heartbreaking, and staying away from your family daily can be emotionally challenging. Missing homemade food, family events, celebrations, and more can lead NRI toward nostalgia. Balancing work and maintaining connections across borders can be demanding. Besides, if you are living in the United States and your loved ones are in India then you have to face difficulties when trying to communicate with family in India.
We all are familiar with our country's policies but being an NRI and managing the administrative affairs of any other country can be challenging. While living in another country, following the visa process, understanding laws, or dealing with paperwork can be complex. In obtaining work permits and managing property or investments in India, NRIs often face complicated challenges.
Everyone thinks that there are various financial benefits to being an NRI. yes, it’s true but the truth is that they have to face multiple challenges in managing finance across the border. Tax implications and currency fluctuation in both countries or investments need to make decisions wisely. Additionally tracking repatriation limits, tax obligations, and understanding the nuances of cross-border transactions can be overwhelming.
Different languages, celebrating festivals, and cultural traditions can create difficulties. Alongside maintaining relations with your family and accepting new cultures, you need a delicate balance. Non-resident Indians also have to face challenges while trying to preserve their heritage while assimilating into the local culture.
Being a non-resident Indian isn’t easy. Everyone has to face some challenges that are mentioned above. Such as financial management, cultural adjustment, and more. So if you also want to become an NRI then must keep the challenges in mind and embark on your NRI journey with positivity.
This blog helps readers to know everything about non-resident Indians (NRIs). Including types of NRI categories, factors that affect NRI status, NRI Bank Accounts, and many more. So if you also want to become an NRI or are looking for an immigration service or NRI service provider, then choose Visament. By choosing this organization you will get several benefits such as inexpensive price, 24*7 customer support, speedy approval, mistake-free Applications, and many more that help them to stand out from the crowd.
Read Also:- List of Indian Banks in the UK with Contact Details and Address
Indian citizens who stay in India for less than eighty-two days in the course of the preceding financial year.
If the taxable income in India exceeds ₹15 lakhs, the provisions concerning stays exceeding 120 days will apply.
Yes, non-resident Indians (NRIs) can apply for an Aadhaar card if they have a valid Indian passport.
182 days during the financial year.
There are three main types of non-resident Indian (NRI): non-resident external (NRE), non-resident ordinary (NRO), and foreign currency non-resident (FCNR).
A "resident" is one who fulfills the specific conditions for being considered a resident in India for tax purposes, and a "non-resident Indian" does not meet any conditions.
