Who is NRI as Per Indian Law? Meaning, Legal Definition, Tax Rules & FEMA Explaine
Who is NRI as Per Indian Law?
An NRI (Non-Resident Indian) as per Indian law is an Indian citizen who resides outside India, but the exact definition depends on the law being applied.
There are two main legal definitions:
- Under the Income Tax Act – Based on the number of days you stay in India
- Under FEMA (Foreign Exchange Management Act) – Based on your purpose and intention of staying abroad
So when someone asks who is NRI as per Indian law, the correct answer is:
It depends on whether you are talking about tax laws or foreign exchange laws.
Who is NRI as Per Indian Law Under the Income Tax Act?
For income tax purposes, the term used is “Non-Resident”, which is commonly called NRI.
A person is treated as Non-Resident (NRI) if they do not qualify as a Resident in India.
You are considered a Resident in India if:
You satisfy any one of these conditions:
- You stayed in India for 182 days or more during the financial year
OR - You stayed in India for 60 days or more in that year AND 365 days or more in the previous 4 financial years
If you do not meet these conditions, you are treated as an NRI for tax purposes.
Important Point
Under tax law, who is NRI as per Indian law depends purely on physical presence in India, not on citizenship alone.
Who is NRI as Per Indian Law Under FEMA?
Under FEMA, the definition is based on residential intention, not just days.
A person is considered an NRI under FEMA if:
- They are an Indian citizen or Person of Indian Origin (PIO)
- They reside outside India for:
- Employment
- Business
- Studies
- Or any purpose indicating intention to stay abroad for an uncertain period
Short visits to India do not automatically change FEMA residential status.
FEMA Definition is Used For:
- Opening NRE/NRO bank accounts
- Sending money to India
- Investing in India
- Property purchase rules
So again, who is NRI as per Indian law under FEMA depends on why and how long you live abroad.
कायदेशीर सल्ल्यासाठी नोंदणी करा
अनुभवी तज्ज्ञांकडून वैयक्तिक कायदेशीर सल्ला
ही सेवा जाहिरात नसून स्वतंत्र कायदेशीर सल्ला सेवा आहे.
Key Difference Between Income Tax Law and FEMA
| Factor | Income Tax Act | FEMA |
|---|---|---|
| Main Basis | Number of days stayed in India | Intention & purpose of stay abroad |
| Used For | Taxation | Banking & foreign exchange |
| Status Changes | Every financial year | When residential situation changes |
| Core Question | How long were you in India? | Are you settled abroad? |
Because of this difference, a person may be:
NRI under FEMA
But Resident under Income Tax Act
(or vice versa)
This is one of the biggest challenges in understanding who is NRI as per Indian law.
Why Knowing Your NRI Status is Important
Understanding who is NRI as per Indian law affects many financial and legal areas:
1. Taxation
NRIs are taxed only on income earned or received in India. Foreign income is generally not taxed in India.
2. Bank Accounts
NRIs must convert resident savings accounts into:
- NRO Account (Indian income)
- NRE Account (foreign income)
3. Property Rules
NRIs can buy residential and commercial property in India but cannot freely buy agricultural land.
4. Investments
Special rules apply to mutual funds, shares, and repatriation of money abroad.
Common Challenges in Determining Who is NRI as Per Indian Law
Different Definitions Under Different Laws
Tax law and FEMA do not match, causing confusion.
Frequent Travelers
People who travel in and out of India often may change status every year.
Complex Tax Rules
Additional categories like RNOR (Resident but Not Ordinarily Resident) make it more technical.
Because of these complications, it’s always safer to consult a Chartered Accountant or legal expert if large money or property is involved.
Final Conclusion
So, who is NRI as per Indian law?
Under the Income Tax Act – It depends on number of days stayed in India
Under FEMA – It depends on living abroad with intention to stay outside India
Both definitions are legally correct, but they apply in different situations. Understanding this difference is essential for taxes, banking, property, and investments.
Disclaimer:
This content is for general information only and should not be considered legal or tax advice. Please consult a qualified professional for guidance based on your specific situation.