NRI or Non Resident Indian Meaning – As Per Law
Understanding the term Non Resident Indian
As per Foreign Exchange Management Act, a person is a Resident of India if he/she stays for 183 days or more in India during the preceding financial year starting from 1st April to 31st March. But, if he/she does not fulfil this condition i.e. he is in India for less than 183 days, he/she shall be considered as a Non Resident Indian.
As per the Income Tax act 1961, a person is a Resident of India if :
- He/she has stayed 182 days or more in India in the current financial year or
- He/she stayed in India for 60 days or more in the previous financial year and 365 days or more in the preceding 4 years (these 4 years shall be counted from the year before the financial year which is into consideration).
So, if you satisfy any of the above conditions, then you become an Ordinary Resident. In case you don’t satisfy them, then you shall be considered as a Non Resident Indian.
Thousands of people migrate from India, some for seeking higher education, while many go just for doing offshore jobs and earn in the foreign currency or setting up their own business. Once established many of them tend to settle in foreign countries.
Such people of Indian origin or the ones who become Non Resident Indians or NRIs over the period of time. Given the limited safe avenues of investment NRIs tend to look to India to park funds in Indian Investments.
The government has also simplified the rules and regulations to encourage NRI Investments in order to boost the economic growth of the country.
Further, the volatile Indian rupee means, as an NRI you will get more returns from Investments in India. Also,the money that Indians send to India will fetch more rupees on conversion due to the depreciating Indian currency.This in itself attracts more NRIs to put their funds in India depending upon their savings and risk appetite.
Therefore,it is imperative to understand the nomenclature and meaning of NRI and has been explained above.
Thus this throws up the numerous opportunities available for NRIs to convert their foreign currency into Indian assets and Investments.The various NR options are:
- Bank Deposits – NRE/NRO and FCNR Deposits
- Mutual Funds
- Direct Equity
- Real Estate
- Bonds/Government Securities
For a detailed analysis on Non Resident options, please stay tuned.