An NRI (Non-Resident Indian) in India is an Indian citizen living outside India for work, business, studies, or other indefinite purposes, generally staying less than 182 days in India during a financial year, with specific tax and FEMA rules defining residency for financial and legal purposes. Key criteria involve staying abroad for 182+ days or meeting alternative stay conditions, especially for high-income earners or Indian citizens/PIOs visiting India, to qualify for NRI banking, investments, and tax benefits.
An NRI (Non-Resident Indian) in India is an Indian citizen who lives outside India for employment, business, or other purposes, generally staying less than 182 days in a financial year, retaining Indian citizenship, voting rights, and benefits like opening specific bank accounts, but requiring NRI accounts for financial dealings. They maintain strong financial and cultural ties to India and have specific tax and banking rules, differing from OCI (Overseas Citizen of India) cardholders, who are foreign nationals of Indian origin.
To be classified as an NRI, you must be an Indian citizen with an Indian passport and residing outside India.
These NRI accounts can only be opened by individuals who have been residing out of the geographical territories of India for at least 120 days in a year and spent less than 365 days in India in four previous years.
New rules for NRIs in India focus on stricter tax residency criteria from April 2026, increasing the stay threshold to 120 days for high-income NRIs (over ₹15 lakh Indian income) to become Resident but Not Ordinarily Resident (RNOR) and introducing "deemed residency" for high-income Indians in tax havens; also, higher TCS thresholds for LRS remittances (to ₹10L) and removal of TCS for education loans are recent changes from Budget 2025-26, alongside increased reporting of foreign assets.
Instead, they need to convert their savings account into an NRO account. That is why you must declare yourself as an NRI, and start complying with the respective rules and regulations as soon as your resident status changes. Not doing so can attract legal and financial penalties.
If you do not satisfy the condition laid out above for a person to be considered a resident in India - you will be considered a NON-RESIDENT INDIAN (NRI). Thus, if you stay in India for less than 182 days, you will be considered an NRI.
You can use an NRE bank account to store foreign currency converted to Indian rupees, while an NRO account is used to keep both foreign income and money earned in India. NRO accounts have a limit for repatriation up to USD 1 million per financial year, but NRE accounts have no such limit.
🎯 Eligibility Criteria
As per NRI Foreign Currency Rules in India NRIs can carry up to US $5,000 in cash and US $10,000, including cash, traveler's cheque, etc. Anything above this limit must be declared before the customs department upon arrival. If the cash is in Indian currency, then only up to Rs 25,000 is allowed.
Embassy wishes to clarify on the citizenship status of OCI cardholders. Constitution of India does not allow holding Indian citizenship and Citizenship of a foreign country simultaneously.
Non-resident Indians (NRIs) are taxed on income earned or collected in India. This could be from sources like property rent, share dividends, and investment and savings capital gains, if over a specified limit. Income earned outside India is not taxable in India.
The 60-day rule is now replaced with a 120-day threshold. Under the new rule, an NRI or PIO earning over INR 1.5 million (US$17,213.6) in India will be classified as RNOR if they: Stay in India for 120 days or more in a tax year. Have stayed in India for 365+ days in the past four years.
What are the types of citizenship in India? According to the Ministry of Home Affairs, there are four ways in which Indian citizenship can be acquired: birth, descent, registration and naturalisation. The provisions are listed under sections 3, 4, 5(1) and 5(4) of the Citizenship Act, 1955.
The "90-day rule" for non-residents typically refers to two different concepts: in U.S. immigration, it's a guideline for determining if a non-immigrant misrepresented their intent by engaging in certain activities (like unauthorized work or immediate marriage) within 90 days of arrival, leading to visa fraud or inadmissibility. In Canadian tax law, the 90% rule allows non-residents to claim full federal tax credits if 90% or more of their world income is from Canadian sources, otherwise, credits are prorated.
New rules for NRIs in India focus on stricter tax residency criteria from April 2026, increasing the stay threshold to 120 days for high-income NRIs (over ₹15 lakh Indian income) to become Resident but Not Ordinarily Resident (RNOR) and introducing "deemed residency" for high-income Indians in tax havens; also, higher TCS thresholds for LRS remittances (to ₹10L) and removal of TCS for education loans are recent changes from Budget 2025-26, alongside increased reporting of foreign assets.
An NRI is a person who is an Indian citizen but resides outside India for a certain period. The Income Tax Act 1961 explains an NRI as a person who satisfies any of the following conditions: He/she is in India for less than 182 days in a financial year (from April 1 to March 31).
As per the Income Tax Act, an individual is considered an NRI if they have not lived in India for 182 days or more in a financial year, or for less than 365 days in the four previous years and less than 60/120 days in the current year.
An NRO account is a Rupee-denominated bank account suitable for NRIs, Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs), who wish to deposit income earned in India, such as rent, dividends, pensions, gifts and proceeds from the sale of immovable property.
As per the Union Budget 2023-24, any monetary gift above ₹50,000 received by a non-ordinarily resident from a resident Indian would be deemed to arise in India and taxable from April 1, 2024. Gifts from a Resident Indian to an NRI can only be sent to their NRO Account.
Yes, as an American living in India, you're required to file an annual U.S. tax return if your income exceeds the IRS minimum threshold, even if all your income is earned in India. The U.S. taxes citizens on worldwide income, regardless of where you live or work.
With the recent changes in the Indian Income Tax Act, it's now possible to pay zero tax on a salary of up to Rs. 7 lakhs. To pay zero tax on a 7 lakh salary using the old tax regime, maximize deductions: Claim Tax Rebate under Section 87A.
NRIs returning to India should proactively manage their banking and investment affairs to ensure compliance with Indian regulations. You should promptly notify the change in your residency status to your bank, broker, AMC, and insurance service providers.