NRI Full Form

 NRI stands for Non-Resident Indian. Non-residents Indian are born into Indian citizens. However, if they emigrated to some other countries for any purpose for more than a given time frame they are considered Non-resident Indians. According to the law of the land, any person who is living outside the territory of India for more than 182 days of a calendar year would be considered an NRI. For an NRI it is mandatory to hold a passport issued by the Government of India. The emigration of such citizens could be anything. It may be some educational purpose, some work relayed purpose, residence, or some other purpose. However, it should be noted that they are citizens of India who live outside the country, and not foreigners.

According to some new constitutional amendments an NRI will be recognized as overseas Indians ( OCs). The Ministry of Overseas Indian Affairs deals with the affairs related to Non-residents of India. All the classification and other statutory provisions related to Non-residents of India are dealt with by this Ministry.

The Ministry of External Affairs Classifies NRIs in the following fashion-

Various Categories of NRIs:

The law of the land classifies the non-residents of India into three principal categories :

1. The first classification is made for public employees working for the government of India. They can either belong to the state government or to the Central Government of India. These officials are sent overseas to bring about work for governments. Such work can be either related to training of the officials, work for Indian embassies in foreign countries, or for any other purpose.
2. Civilians of Indian citizenship work in international institutions such as the World Bank, the International Monetary Fund ( IMF), the United Nations Organization ( UNO), and so on. 
3. Indian citizens living abroad for jobs other than public services, business, education, tourism, and any other purpose.

Benefits of Being an NRI

• High earning potential: NRIs often earn more than what they would have earned in their home country. because of the higher wages and better job opportunities available in the country they are living in. they enjoy a better standard of living because of their high earning potential.

• Better healthcare and education: NRIs often have access to better healthcare and education facilities in the country they are living in. because of higher income, they are more able to focus on health and education.

• Cultural exchange: NRIs have the opportunity to experience different cultures and traditions. which can broaden their perspective and help them gain a better understanding of the world.

• Tax benefits: NRIs can avail of several tax benefits such as tax exemption on foreign income and capital gains. They can also avoid double taxation by claiming relief under the DTAA agreement between the country in which they are residing and their home country.

Double Tax Avoidance Agreement (DTAA) is a bilateral agreement between two countries. The basic objective of which is to promote economic trade and investment between two countries by avoiding double taxation.

How NRIs Play a Crucial Role in the Economy 

• NRI can play a significant role in shaping the country’s financial, social, and economic conditions. In the last few years, NRIs have started merging into varied activities in India including market development such as outsourcing, technology transfer, and tourism.

• Many NRI businesses like UAE based companies-Lulu International, NMC Healthcare, etc announced major multi-million investment projects in India. All these will create new employment opportunities in the country and the economy will gain momentum.

• remittances/transfers by NRIs back to their families, relatives, or friends are one of the major sources of foreign exchange inflows into the country.

• NRIs can help promote cultural exchange between both their home country and the country they are living in. This can lead to a greater understanding and appreciation of each other’s cultures which can benefit the economy by promoting trade and investment opportunities. 

Rights of Non-Resident Indians (NRIs)

1. Voting

Parliament passed the Representation of the People (Amendment) Bill, 2010 to allow NRI voters to vote in Indian elections. But it came with a condition that on the day of the poll, one can vote only if he is physically present in the constituency.

2. Tax

Income tax rules FOR NRIs are different from the regulations that apply to resident Indians. NRIs need to pay tax on all income and capital gains earned in India.

3. Property

The RBI says that an NRI can buy various kinds of commercial and residential properties in India, but not agricultural land or plantation property.

Non-Residents Indian and Income Tax Act :

According to the Income-tax Act Non-Residents Indians are Indian citizens living outside the country for 
more than 182 days in a calendar year.

An individual will be considered a resident of India only if he/she fulfills the following conditions: 

1. He/she has stayed in India for 182 days or more than that period.
2. If he stayed in India for at least 365 days or more in the preceding four years from that year. And he/she is living in India for 60 days or more in that year.

Rupee Accounts maintained by NRIs

The Non-Residents Indians ( NRIs) can maintain the following 3 types of rupee accounts :

1. NRE: Non-Resident ( External) Rupee account.

NRE accounts are opened for NRIs and it is also rupee-denominated account. This account is fully repatriable i.e. principal and interest amount both can be moved from India to the foreign country where the NRI is residing. All NRIs can open an NRE account. However, individuals and entities in Bangladesh and Pakistan require prior approval from the Reserve Bank of India. 

2. NRO: Non-Resident ( ordinary) rupee account.

NRO accounts are opened for only those individuals who are leaving India to take up employment or establish business outside India and is a rupee denominated accounts. Local funds that are not eligible to be remitted abroad must be credited to an NRO account. This account has restricted repatriable. Any person resident outside India ( other than a person resident in Nepal and Bhutan) can open an NRO account. Individuals and entities of Bangladesh and Pakistan require prior approval from the Reserve Bank of India. 

3. FCNR: Foreign Currency Non-Resident ( Bank ) Account.

FCNR accounts are opened by NRIs and are denominated in any foreign currency which is freely convertible. This account is fully repatriable. One of the attractive features of an FCNR account is that the money deposited can be in permissible foreign currencies and the interest rate completely depends on the currency type deposited.