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Reviewed January 2024
Non-Resident Indian (NRI) status refers to the classification assigned to individuals who have Indian origins or are Indian citizens and have lived outside India for a significant period. This status is determined by considering factors such as the duration and purpose of their stay abroad, as well as their income and residential status.
The Wego team has thoroughly investigated the crucial information related to determining your NRI status in India. Keep reading to learn more.
Table of Contents
NRI status 2024
NRI, or a Non-Resident Indian, is a citizen of India who resides outside the country, primarily for business or employment reasons, but still maintains ties to their home country. These ties could be financial, cultural or family-related.
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NRI status requirements
To determine whether an individual is an NRI or not, their residential status is required to be determined under Section 6 of the Income-tax Act.
As per section 6 of the Income-tax Act, an individual is said to be a non-resident in India if they are not a resident in India. Consequently, the individual will be considered a resident of India for a financial year if:
- they have resided in India for at least 6 months (182 days) during the financial year
- they have been in India for 2 months (60 days) in the previous year and have lived for one whole year (365 days) in the last 4 years.
- being a citizen of India, they have a total income (other than income from foreign sources) exceeding INR 15,00,000 during the relevant financial year. Moreover, they are not liable to tax in any other country or territory by reason of their domicile or residence or any other criteria of similar nature (deemed residency rule):
- the 60-day condition is extended to 182 days if the individual, being an Indian citizen, is leaving India for employment outside India.
- the 120-day rule is applicable to individuals who are Indian citizens or persons of Indian origin (PIO) residing outside India and visiting India. The rule allows for a stay of up to 120 days if the total income of such individuals, excluding income from foreign sources, exceeds INR 15,00,000. However, if the total income (other than income from foreign sources) is up to INR 15,00,000, the 60 days condition is extended to 182 days.
Please note that a person shall be deemed to be of Indian origin if they, or either of their parents or grand-parent, were born in undivided India.
NRI status calculator
In order to calculate the duration of your stay in India, it is necessary to consider all the days you were physically present within the country during the applicable financial year. This encompasses both the day of your arrival and the day of your departure.
To calculate the number of days and your NRI status in 2023 or for previous assessment years, follow the steps given below:
- visit the Income Tax India page to use their “Residential Status Calculator“
- fill in all the required details accurately
- you will be able to see the total number of days on screen
NRI status certificate
An NRI certificate is a document that certifies that a person holding an Indian passport is an NRI. It is issued by Indian missions or consulates abroad to enable NRIs to sponsor their close relatives for admission under the NRI quota in educational institutions in India.
The process to obtain an NRI certificate may vary depending on the embassy of your country of residence. However, generally, you would need to follow these steps:
- visit the Indian embassy or consulate in person in your country of residence to apply for an NRI certificate.
- bring supporting documents such as your employer’s letter mentioning your period of stay in the foreign country or your foreign identity card.
- submit your original passport along with the application. If you have changed passports in the past, you must also submit your previous passports as evidence of your first entry into the foreign country.
- pay the necessary consular fees.
Please note that the specific requirements and procedures may differ based on the embassy or consulate, so it’s recommended to check with the Indian mission in your country for the most accurate and up-to-date information.
NRI status income tax
The income tax for NRIs depends on their residential status. If you are considered an Indian resident, your worldwide income is taxed according to Indian tax laws. However, if you are classified as an NRI for a particular year, only the income you earn or accumulate in India will be subject to taxation under Indian tax laws.
Additionally, NRIs have the option to hold two types of accounts: a Non-Resident External (NRE) account and a Non-Resident Ordinary (NRO) account. The NRE account is meant for transferring foreign earnings to India, while the NRO account is used to manage income generated within India by NRIs. Any interest earned on an NRE account is not taxable in India. On the other hand, if you earn interest on the funds in your NRO account, it will be subject to taxation.
It’s important to note that any income obtained from sources outside India will not be taxed in India. Please visit our dedicated article to know more:
