Non- Resident Indian

nri meaning

Meaning of Non-Resident Indian

Non-Resident Indian means a person resident outside of India who is either a citizen of India or a person of Indian origin (PIO). PIO has been defined differently in different notifications, so the term  Non-Resident Indian can have different meanings. In general, PIO is a person of Indian origin who is not a citizen of India. A PIO might have been a citizen of India but took the citizenship of another country, or might have ancestors born in India. Therefore, NRI may be a person who is a citizen of India and holds an Indian passport, but, who neither stays in India nor has the intention to stay in India for a substantial period of time.

As per the Income Tax Act, 1961, an individual is considered to be a Resident of India for the relevant previous financial year if he is in India either for at least 182 days in that year or at least 365 days during 4 preceding financial years and 60 days in the year in question. An individual who does not satisfy any of the two mentioned conditions is a Non- Resident Indian. The determination of residential status under  FEMA (Foreign Exchange Management Act) is different from the Income  Tax  Act. Under FEMA, the residential status of a person is primarily determined based on the intention.

Voting Rights of Non- Resident Indians: Earlier, non- resident Indians were not allowed to vote in the elections. However, after an amendment in 2010, they were permitted to vote at their particular constituency in India, but it required their direct presence in India at the particular polling booth where the name was registered with the Election Commission.

Formation of a Company by a Non-Resident Indian: With the coming of the New Companies Act, 2013, a new concept of one person company has been introduced but that one person should be an Indian resident. NRIs, PIOs, and Foreign Nationals are not eligible for forming this type of company. Companies Act only permits Non- resident Indians to act as directors of an Indian Company. To form a company, only option left with Non- Resident Indian is to form- Public or Private Limited Company, and in both, at least one person needs to be Indian resident and citizen.

Unique Identification Number of a Non-Resident Indian: Aadhar card enrolment of a Non- Resident Indian is the same as it is for any Indian citizen and a Unique Identification Number is issued to them. The application could be filled online. The documents required to apply are Identity proof, Address proof, Date of birth proof, and a document proof containing relationship details to the head of the family.

Types of bank account maintained by Non-Resident Indians

   1. Ordinary Non-Resident Rupee Accounts (NRO Accounts)

Such type of account is a rupee-denominated non-repatriable account and can be in the form of savings,  current, recurring, or fixed deposits. It can be opened jointly with residents in India. When an Indian National/  PIO resident in India leaves India for a particular reason, his bank account in India gets designated as NRO account. An only person resident outside India (other than a person resident in Nepal and Bhutan) can open such an account. Individual/ entities of Bangladesh/ Pakistan nationality/ownership, as well as erstwhile OCBs, require prior approval of Reserve Bank of India).

     2. Non-Resident External Rupee Accounts (NRE Accounts)

Such type of account is a rupee-denominated account and can be in the form of savings,  current, recurring, or fixed deposit accounts.  It can be opened by remittance of funds in free foreign exchange.  The foreign exchange brought in legally or repatriable incomes of the account holder can be credited to the account. Joint operation with other Non- Resident Indians is permitted. The power of attorney can be granted at any time to Indian residents for the operation of accounts. Also, the balance in the account is freely repatriable.  There is a provision of tax exemption on the interest lying to the credit of  NRE accounts.

      3. FCNR (Foreign Currency Non-Resident) Account

It is a fixed-term bank account that can be opened in India by a Non- Resident Indian or a person of Indian origin to transfer their foreign income in the same currency. These accounts can be opened and maintained in the following 6 different currencies:

  • Pound Sterling
  • Euro
  • Japanese Yen
  • Australian Dollar
  • Canadian Dollar
  • US Dollar

Any balance in this account is freely repatriable. The principal amount deposited into this account and the interest accrued thereon is not subject to tax under the Income Tax Act, 1961.


Many of the Indians are staying abroad for work or any other commitments but remain the citizen of India. Therefore, there is a need for individual rights to secure their interests. There are sufficient provisions to provide for the rights of Non- Resident Indians. A bill which is yet to be passed by Rajya Sabha, the Upper House of Parliament, if passed will allow Non- resident Indians to appoint proxies, which will change after every election, to vote on their behalf. This would be a step further to protect the interests of Non- Resident Indians.

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by Srishti arora

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