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Understanding the Differences Between NRI, OCI, and PIO: What You Need to Know
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Related Information
NRIs have multiple investment options in India. The list includes fixed deposits, equity, mutual funds, bonds, non-convertible debentures, pre-IPO investments, National Pension Scheme, Public Provident Fund, and real estate.
Yes, OCIs are subject to tax in India on their income generated within the country.
Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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It is important for any individual of Indian descent living abroad to understand the difference between Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs). Each category has a crucial impact when making financial decisions.
This article aims to explore the definitions and differences of NRI, OCI, and PIO. Tag along!
Definition of NRI, PIO, and OCI
Who is an NRI?
As defined by Foreign Exchange Management Act (FEMA), an individual who resides out of India for education, employment, business, or any other purpose, with the intention of staying abroad for an indefinite period, is considered an NRI.
As per the IT Act, you are an NRI if:
For matters related to taxation, your status is determined by the definition under the IT Act. You will retain the NRI status even if you visit India, as long as you fulfill the conditions above.
Who is a PIO?
Please note: The PIO scheme was merged into the OCI scheme in 2015. As a result, all PIO cardholders were re-classified as OCI cardholders. The deadline for converting your PIO card into an OCI card is 31st December, 2025
A PIO or Person of Indian Origin, simply put, is a foreign citizen who previously held an Indian passport, or has ancestors who were Indian nationals.
As per the existing regulations, a ‘Person of Indian Origin (PIO)’ is a person residing outside India with citizenship of any country other than Bangladesh or Pakistan or other country specified by the Indian Government, satisfying the following conditions:
Who is An OCI?
Any person holding an Overseas Citizen of India card is an OCI. A person of Indian origin who is eligible for Indian citizenship as of 26th January, 1950, or belonged to a territory that became part of India after the 15th of August, 1947 is eligible for an OCI card. Children of such individuals are also eligible for an OCI card.
No person, who is or had been a citizen of Pakistan, Bangladesh or other country as the Indian Government may, by notification in the Official Gazette, specify, shall be eligible for registration as an overseas citizen of India.
The registered Overseas Citizens of India shall not be entitled to the rights conferred under article 16 of the Constitution to Indian citizens with regard to equality of opportunity in matters of public employment. Detailed instructions and procedures on the OCI Scheme are available on the MHA website: www.mha.nic.in
What is the difference between a PIO, OCI, and NRI?
Let's understand the difference between NRI, PIO, and OCI:
Citizenship
Indian citizens residing abroad
Foreign citizens of Indian origin
Foreign citizens of Indian origin
Rights and Benefits
NA
Restrictions
NA
Wrapping Up!
Understanding the differences between the three categories will help you understand your legal standing, resulting in more informed decisions. It is important to remain up to date on policies so that you are aware of the benefits available for you in your homeland.
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