A Non-Resident Indian is an individual who is a citizen of India or a Person of Indian origin (PIO)* and who is currently not a resident of India.

*A person shall be deemed to be of Indian origin (PIO) if he/she satisfies any of the following conditions:

1.if he, or either of his parents or any of his grandparents, was born in undivided India.

2.If he/she is a spouse of an Indian Citizen

3.If he/she held an Indian passport any period of his lifetime.

As per FOREIGN EXCHANGE MANAGEMENT ACT, 1999 & Income Tax Act 1961, an individual or POI is said to be NRI if he/she satisfies any of the following conditions:

1. If he/she is in India for 182 days or less during the preceding financial year; or
2. If he/she is in India for 60 days or less during the previous year and 365 days or less during 4 years immediately preceding the previous year(PPY).
3. If he/she stays outside India for an indefinite period for employment or carrying a business or vocation activity.

However, condition No. 2 does not apply where an individual, who left India for employment or crew member of the Indian Navy ship.

Post-Budget 2020 :

In this Budget 2020, A new rule has been proposed for NRI’s residency status,

1.Condition-1 of 182days is changed. An Indian Citizen or POI has to stay overseas 245days in the Financial Year(FY)*. i.e) he/she can only stay in India less than 120days in that FY.

2.Condition – 2 & 3 remains the same.

Illustration :

Let’s Assume if Gokul leaves India and Stayed for 250days abroad in the FY 2020-21, then for the Assessment year(AY)* 2021-22, Gokul’s residential status would be NRI.

Let me tell another example where Gokul’s wife left India and Stayed with him for 6Months Say 180days abroad in the FY 2020-21, then for the AY 2021-22, her residential status would be Resident of India.

*In India, Financial Year(FY) starts from 01-April to 31-March – the year in which the person earns an income.

*The assessment year (AY) is the year that comes after the FY – the year when income earned during FY is assessed and taxed. That is why ITR have AY.

For the Calculation of days stayed in India,

Dates stamped in Indian Passport is considered as proof.

Both the Arrival date and Departure date are counted as days stayed in India.

If you are traveling to India for vacation every 3 months, It is advisable to track the no of days stayed and Keep yourself a Count-down Chart.  Max Value should be 119days in that chart. Keep on reducing the value once after the trip. Plan your trips based on the days left on the chart.

Please check out the IT Residential Calculator here.

Table of NRI Population:

Population of Overseas Indians

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