Open NRI Savings Account
Whether you’re planning to move overseas, managing finances can be a challenge. It’s important to know how India classifies and treats NRIs. This will help you manage your earnings in India and abroad. In this guide, we’ll explain what NRI is according to banking and financial regulations, and how this status affects your accounts, investments, and taxation.
The meaning of NRI refers to an Indian citizen living abroad for work, business, education, or other reasons. Taxation on their income depends on its source, and banks offer tailored products based on their financial profile.
Determining who is NRI requires understanding the definitions under both the Income Tax Act and FEMA. The Income Tax Act defines NRI based on the individual’s duration of stay in India for taxation purposes, whereas FEMA considers residency status and intent to reside abroad. The following sections explain both criteria in detail.
Under the Income Tax Act of India, a person is a Non-Resident Indian (NRI) for an income year if:
There are exceptions, though. For example, Indian citizens who travel from India to work overseas or as crew on Indian vessels have to spend less than 182 days in India in the same financial year to qualify as NRIs.Example:If you are an Indian citizen and leave India for employment abroad, for example, if you take up a job in Dubai and fly out on 15 July 2024, you will have stayed in India for only 106 days between 1st April and 14th July 2024. Since your stay is less than 182 days and you have left the country for a job, you would qualify as an NRI for the financial year 2024 to 2025 under the Income Tax Act.
As per the Foreign Exchange Management Act (FEMA), meaning of NRI applies to a person residing abroad who meets either of these conditions:
While the meaning of NRI, OCI, and PIO statuses all relate to India, they differ in citizenship, residency, and rights. Knowing these distinctions is important for banking, taxation, and investment eligibility. Here's a quick comparison:
Feature
NRI (Non-Resident Indian)
OCI (Overseas Citizen of India)
PIO (Person of Indian Origin)*
Citizenship
Indian
Foreign
Residency
Lives outside India for 182+ days
May or may not have lived in India
Passport
Holds Indian passport
Holds foreign passport
Who Qualifies
Indian citizens living abroad temporarily or long-term
Former Indian citizens or descendants
Persons of Indian origin (up to 4 generations)
Visa Requirement
Not applicable
No visa required to visit India
Required a PIO card (now merged with OCI)
Property Rights in India
Can buy/sell all except agricultural land
Same as NRI
Government Jobs
Eligible
Not eligible
Voting Rights
Yes
No
Below are some of the key NRI account benefits and other financial advantages available to you in India.
Manage your wealth effortlessly while enjoying premium benefits through the DBS Treasures NRI savings account.
NRIs enjoy a wide range of investment opportunities in India, but certain restrictions still apply under RBI and FEMA rules. Knowing the difference helps you stay compliant and avoid costly mistakes.
NRIs have the option to open three main categories of bank accounts in India. These accounts help manage earnings from India as well as funds transferred from abroad, with specific rules for repatriation and taxation. Before choosing one, it’s important to understand what NRI account is and how each type (NRE, NRO, and FCNR) serves different purposes.
Even financially savvy NRIs can make errors that lead to tax issues, compliance problems, or missed benefits. Here are some to watch out for:
The NRI meaning goes beyond simply living outside India. It reflects a change in residence driven by personal or professional circumstances. People may become NRIs for reasons such as:
NRI taxation in India depends on your residential status, source of income, and the applicable income tax slabs. It is important to determine whether your income is taxable in India or exempt, as rules vary for earnings from within India and abroad. Proper tax planning can help NRIs reduce liabilities, claim deductions, and ensure compliance with Indian regulations.
As an NRI you will be required to pay income tax if you’re earning from the following sources in India:
Foreign Income earned outside India or interest earned on NRE and FCNR accounts remain tax-free in India.
The following table outlines the applicable income tax rates for NRIs for the financial year 2025. These slabs are a key part of NRI taxation, helping individuals plan income, investments, and tax liabilities effectively.
Income Range
Tax Rate
Up to INR 3,00,000
Nil
INR 3,00,000 - INR 7,00,000
5%
INR 7,00,000 - INR 10,00,000
10%
INR 10,00,000 - INR 12,00,000
15%
INR 12,00,000 - INR 15,00,000
20%
Above INR 15,00,000
30%
The Double Taxation Avoidance Agreement (DTAA) is a treaty between India and over 90 countries to ensure NRIs don’t pay tax twice on the same income. It allows you to claim tax relief in one country if you’ve already paid in the other, usually by providing a valid Tax Residency Certificate (TRC).
Understanding what NRI is for effective financial management, tax compliance, and smart investment planning is. From selecting the right NRI account to knowing applicable taxation rules, NRIs can better protect earnings and optimise returns. Whether relocating temporarily or permanently, a clear understanding of these aspects ensures secure, compliant, and efficient financial planning in India and abroad. Consider exploring options like the DBS Treasures Premium Savings Account to enhance your NRI banking experience with tailored benefits.
