NRI Services

Who is NRI ?
An Indian abroad is popularly known as Non-Resident Indian (NRI). NRI status is legally defined under the Foreign Exchange Management Act, 1999 and the Income-tax Act, 1961 for applicability of respective laws.

Non resident under FEMA 1999
Person resident outside India means a person who is not resident in India.

Person resident in India means:

1. A person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include :

• A person who has gone out of India or who stays outside India, in either case
  1. For or on taking up employment outside India, or
  2. For carrying on outside India a business or vocation outside India, or
  3. for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
• A person who has come to or stays in India, in either case, otherwise than
  1. For or on taking up employment in India, or
  2. For carrying on in India a business or vocation in India, or
  3. For any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;

2. Any person or body corporate registered or incorporated in India,
3. An office, branch or agency in India owned or controlled by a person resident outside India,
4. An office, branch or agency outside India owned or controlled by a person resident in India;

Non resident under Income-tax Act, 1961
The term non-resident is negatively defined under section 6 of the Income-tax Act, 1961. An individual who is not a resident under the Income-tax Act is a non-resident. The residential status of an Individual is determined based on the number of days of stay in India. Financial year (FY) is April to March.

For the purposes of levy of tax, the Income-tax Act in India has classified the status of an individual assessee into three viz.,
1. Resident and ordinarily resident (ROR)
2. Resident but not ordinarily resident (R but NOR)
3. Non-resident (NR)

The definition is explained in simple terms as under.

*Not applicable to a resident going outside India for employment, a resident who leaves India as a member of crew of an Indian ship, an Indian citizen or person of Indian origin who is abroad and comes to India for a visit i.e. if such a person stays in India for less than 182 days, he would be a non-resident.

In the case of a ROR, his global income is taxed in India. Normally a returning Indian would be assessed as RNOR on his return to India.

In the case of a Non-resident, only the income earned or received in India is taxed in India. Accordingly, income earned outside India by him would not be taxable in India.

India has contracted Double Tax Avoidance Agreements (DTAAs) with various countries. Taxability of Non Resident's Indian income would be decided as per the provisions of these DTAAs. Most of these DTAAs contain provisions for lower rates of tax in case of incomes like dividend, royalties, fees for technical services etc.

Where can we help?