Who is an NRI?
A person who does NOT satisfy the following conditions is an NRI:-
a) He/she is in India for 182 days or more during the financial year OR
b) If he/she is in India for at least 365 days during the 4 years preceding that year AND at least 60 days in that year.
Who is a person of Indian origin (PIO)?
A Person of Indian Origin (PIO) means a foreign citizen (except a national of Pakistan, Afghanistan Bangladesh, China, Iran, Bhutan, Sri Lanka and Nepal) who at any time held an Indian passport.
OR who or either of their parents/ grand parents/ great grand parents was born and was permanently resident in India as defined in Government of India Act, 1935 and other territories that became part of India thereafter provided neither was at any time a citizen of any of the aforesaid countries (as referred above);
OR Who is a spouse of a citizen of India or a PIO.
What are the different types of rupee accounts that are permitted and can be maintained by NRIs?
A NRI can maintain three types of rupee accounts in India as mentioned below -
NRE: Non-Resident (External) Rupee Account
NRO: Non-Resident (Ordinary) Rupee Account
FCNR- B: Foreign Currency (Non -Resident).
What are NRE and NRO accounts?
Non-Resident (External) Rupee (NRE) Account - NRE is a rupee bank account from which funds are freely repatriable. It can be opened with either funds remitted from abroad or local funds maintained in NRE/ FCNR accounts, which can be remitted abroad. The deposits can be used for all legitimate purposes. The balance in the account is freely repatriable.
Interest credited to the NRE accounts is exempt from tax in the hands of the NRI.
Non-Resident Ordinary Rupee (NRO) Account - NRO is a Rupee (INR) bank account and can be opened with funds either remitted from abroad or generated in India. The amounts in such an account generally cannot be repatriable. However, funds in NRO accounts can be remitted abroad subject to/as per various directives in force at the time of repatriation.