Who is an NRI ?

The term 'Non Resident' is a very broad term and includes all non-residents whether Indian or foreign citizen. These can be categorized as follows:

1. Non Resident Persons of Indian Nationality
2. Non Resident Foreign Citizens of Indian Origin
3. Non Resident Foreign Citizens of Non-Indian Origin

The meaning of 'Non Resident' is quite different under the two legislation's viz., The FEMA 1999 and The Income Tax Act, 1961. It is the nationality and purpose of stay of an individual outside India, which is relevant for determining the residential status under FEMA, whereas period of stay outside India determines the residential status of a person under Income Tax Act. Under FEMA a resident is bound by several restrictions with regard to dealings in foreign exchange whereas a non-resident gets immunities from various obligations. Both the definitions are mutually exclusive for the purposes of operations of these Acts. A person who is resident under the Income Tax Act has to pay income tax on his entire income earned in India or abroad, whereas a non-resident under I.T. Act has to pay income tax only on his Indian income.