An individual who has or had roots in India but lives overseas is categorized as an NRI or PIO or OCI. While an NRI is a residential status given to a citizen of India with an Indian passport who is living abroad for the purpose of work, business or education, PIOs and OCIs are foreign nationals of Indian origin. There are several points of similarity between PIO and OCI cardholders and are misunderstood by a large number of people. However, there are marked differences between them. In this article, we will do a clinical analysis of PIO vs OCI cardholders.
Being a Non-Resident Indian (NRI) is tough. Time and again, you come across different definitions that tend to confuse you. Also, there are amendments and interpretations that can make it all a bit more complex. So, in this category find the definitions of the basic terms that you will come across in the overall understanding of being an NRI.
NRI as per FEMA
Non-Resident Indian (NRI) as per FEMA or Foreign Exchange Management Act is a person who has gone out of India or stays outside the country for the purpose of employment, business, vocation (occupation for which an individual is trained) or any other circumstances indicating his/her intention to stay outside India for an uncertain period of time (job or assignments where you don’t know when you will return to India).
“Non-Resident Indian” is also covered under the regulations of FEMA as “A person residing outside India who is either a citizen of India or a Person of Indian Origin (PIO)
RBI has also mentioned that students studying abroad will also be treated as NRI under FEMA and will be eligible for foreign investments and NRE/FCNR accounts.
According to Income Tax regulations, a citizen will be a resident of India in the previous year, if:
- He/she is in India for at least 182 days in that year, OR
- If the individual was not in India for at least 182 days in the previous year but he/she was in India for at least 365 days during the last 4 years to that year and at least 60 days during that year
Case 1: Consider you were in India for 207 days in 2019, then you are a resident of India for 2019.
Case 2: Say, you were in India for 70 days in 2019, then you fail the first criteria! But you were in India during the entire time span of 2014-2018. Then you are a resident of India in spite of not being in the country for at least 182 days in 2019.
The individuals not satisfying the two cases mentioned above will be treated as Non-Resident Indians (NRIs) according to the Income Tax Regulations.
- A person who was born in India
- A person who at any time, held an Indian Passport or
- An individual who is either a citizen of India or whose father/mother/grandfather/grandmother was/were a citizen(s) of India
- The spouse of an Indian Citizen or a PIO
Foreign Citizenship in case of a Person of Indian Origin will not include citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan.
PIO is associated with the citizenship of an individual and not his/her residence.
2. OCI: OCI refers to Overseas Citizen of India which can be simply understood as the status given to people with a foreign citizenship who are granted with certain rights and freedoms that the citizens of India and NRIs enjoy except the following rights: voting rights, candidature in various houses of government, constitutional posts such as President, Supreme Court Judge etc. government employment, acquisition of agricultural or plantation properties.
OCIs or Overseas Citizens of India are entitled to multiple benefits under the OCI Card Scheme (Mandatory scheme for OCIs to enroll for an OCI card to enable entry in the country with or without their foreign passports); the eligibility criteria are as follows:
- A former Indian citizen (on or after January 16, 1950)
- A person belonging to any part merged to India after August 15, 1947
- A person whose parents, grandparents or great-grandparents are/were Indian citizens
- A person married to an Indian Citizen or an existing OCI for at least 2 years
OCIs have the permission to work indefinitely in India. The increased demand for dual citizenship (holding passports of two different countries) in India resulted in the introduction of the OCI Card. Citizens of countries allowing dual citizenship can apply for an OCI card in India.
- Multiple entry; Lifelong visa to visit India
- Similar benefits to NRIs in educational, financial and economic fields
- The OCIs will be treated in the same way as Indian nationals considering the domestic air fare tariffs
- Applications submitted from outside India: $275 or equivalent local currency
- Applications submitted in India: Rs.15,000/-
Application for OCI Card is available on https://ociservices.gov.in/
On 9th January 2015, PIO Card Scheme (issuing of Cards to Persons of Indian Origin to allow visa-free travel to India) was withdrawn by the Government of India and has been merged with the OCI Card Scheme.
Foreign Exchange Management Act, popularly known as FEMA, was introduced in 1999 to replace the Foreign Exchange Regulation Act (FERA), 1973. FEMA, 1999 was formulated to consolidate and amend the law concerning foreign exchange with the objective of facilitating foreign trade and payments and hence several economic reforms were introduced under the Act. What is FEMA (Foreign Exchange Management Act) is asked by many people. Let’s go through the objectives of FEMA, as well as features and provisions of FEMA Act 199.
A seafarer or merchant navy worker is someone who works for a shipowner to do ship service on the sea. Work performed by seafarers includes assisting as a crew member in the operation and maintenance of ships as part of his/her contractual employment.
GWF (Global Web Form) number is a unique serial number or reference number that is issued when you first apply for a UK visa. You can get it from your online appointment record like on emails, or letters from the Home Office about your UK visa application. You get the number as soon as you make the payment and submit the application online. If you don’t apply for a visa online, your details are pending in the immigration system and you will need the GWF number to book an appointment.
The full form of IMPS is Immediate Payment Service. IMPS is an instant payment interbank funds transfer system in India that facilitates fast and hassle-free funds transfer within banks across India. IMPS offers an instant 24*7*365, electronic funds transfer service that could be accessed through multiple channels such as mobile, internet, SMS, in real time.
The Chief Operating Officer is the full form of COO. The COO is a senior executive responsible for overseeing a company’s day-to-day administrative and operational functions. Typically, the COO directly reports to the CEO (Chief Executive Officer) and is considered the second highest position in the management hierarchy.
The full form of KYC is Know Your Customer or Know Your Client. Through the KYC process, a company verifies the customer’s identity, suitability and risk involved with maintaining a business relationship. The KYC process is also undertaken by companies to make sure their proposed customers, clients, agents, consultants, or partners are actually who they claim to be.
The full form of NPCI is the National Payments Corporation of India. An initiative of the Reserve Bank of India, NPCI is an umbrella organisation for operating retail payment and settlement systems in India. It has been established by the Reserve Bank of India (RBI) and Indian Bank’s Association (IBA) as a “Not for Profit” company under the provision of Section 8 of Companies Act 2013, for creating a robust physical as well as electronic payment and settlement infrastructure in India.
The full form of PMC Bank is Punjab & Maharashtra Co-operative Bank. PMC Bank is a multi-state scheduled urban cooperative bank headquartered in Mumbai, India. The bank operates in several states including Maharashtra, Delhi, Karnataka, Goa, Gujrat, Andhra Pradesh and Madhya Pradesh. Founded in 1984, today the bank has a network of 137 branches across six states.
The full form of MRP is Maximum Retail Price. It is the highest price that can be charged by manufacturers for a product before the sale in India. Maximum retail price must be labelled on every product sold in India. Maximum retail price printed on products is inclusive of all taxes. Retailers can’t charge customers more than the MRP. However, some shops may charge slightly below to attract more customers to their stores.