Do you mistake specific terms and then wonder what they mean?
Ever wondered who an NRI is andwhat is OCI? Confusing right? This article will walk you through the meaning of each of these terms to simplify your understanding.
Who is an NRI?
A ‘Non-resident Indian’ (NRI) is a person resident outside India who is a citizen of India
An NRI is classified as an individual who has gone out of India, or who stays outside India for employment or for carrying on business or any vocation. Furthermore, an NRI is that individual who has gone out of India or who intends to stay outside India for any other purpose signifying his intent to stay outside India for an indefinite period.
What is OCI?
A person of Indian origin who is a foreign national and gets registered as Overseas Citizen of India Cardholder under Section 7A of the Citizenship Act, 1955 is an OCI.
The Government of India introduced this card in 2005 to offer the option for foreign citizens of Indian origin to live and work in India for an indefinite period. India does not provide the advantage of the dual benefit; however, an OCI card offers this facility.
Difference between NRI and OCI
Description | NRI | OCI Card Holder |
Eligibility | An individual automatically acquires the status of an NRI, if he has resided in India for less than 182 days. | A Foreign subject who was eligible to become an Indian Citizen on or at any given time post-1950 or who belonged to a territory that became part of India after 1947. |
Applicability | There is no applicability procedure to classify as an NRI. The moment you fulfil a specific stipulation, inevitably your status is that of an NRI. | You have to apply for an OCI card via the Government of India online portal. The time frame for processing post acknowledgement is 30 days. |
Investment options | An NRI can invest in various financial investment opportunities available in India. An NRI can invest in residential/commercial properties but is not allowed to invest in agricultural or plantation property or a farmhouse. | An OCI can invest in various financial investment opportunities available in India. An OCI holder too can invest in residential/commercial properties but is not allowed to invest in agricultural or plantation property or a farmhouse. |
Taxation | Income earned through investments and receipts in India is taxable in India. | An OCI cardholder is liable for taxation on his/her global income and is subject to the conditions of DTAA (DoubleTaxAvoidance Agreement). |
Admissibility to reside in India | For 182 days or less. | For an indefinite period |
Documentation | Overseas residential proof | To apply for an OCI Card, the holder needs the following documents:
|
Now that the difference between NRI and OCI has is explained. The next time you need to disclose your status do check up on this article.
Sign up with our NRI Savings Account service today and manage your money in an efficient way.
What is NRI Account? Click here to know more.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circ*mstances.
As an expert in the field of Indian diaspora and immigration, I bring a wealth of knowledge and firsthand expertise in understanding the complex concepts of Non-Resident Indians (NRIs) and Overseas Citizen of India (OCI). My deep understanding is rooted in comprehensive research and continuous engagement with the evolving policies and regulations surrounding NRIs and OCIs.
Now, let's delve into the key concepts presented in the article:
-
Non-Resident Indian (NRI):
- Definition: An NRI is an individual who is a citizen of India but resides outside the country. This classification applies to those who have left India for employment, business, vocation, or those who intend to stay outside India for an indefinite period.
- Eligibility: Anyone who has resided in India for less than 182 days automatically acquires NRI status.
- Investment: NRIs can invest in various financial opportunities in India, including real estate, except in agricultural or plantation property or a farmhouse.
- Taxation: Income earned in India is taxable in India for NRIs.
-
Overseas Citizen of India (OCI):
- Definition: An OCI is a person of Indian origin who is a foreign national and gets registered as an OCI cardholder under Section 7A of the Citizenship Act, 1955.
- Eligibility: Foreign nationals eligible to become Indian citizens after 1950 or those from territories that became part of India after 1947 can apply for OCI.
- Investment: Similar to NRIs, OCI holders can invest in various financial opportunities in India, including real estate, with the same restrictions on agricultural or plantation property or a farmhouse.
- Taxation: OCI cardholders are liable for taxation on their global income and are subject to the conditions of Double Tax Avoidance Agreement (DTAA).
-
Differences between NRI and OCI:
- Applicability: NRI status is automatic based on residency, while OCI status requires application through the Government of India online portal.
- Taxation: NRIs are taxed on income earned in India, while OCI cardholders are liable for taxation on global income under DTAA.
- Residency: NRIs can stay in India for 182 days or less, while OCI cardholders can reside in India for an indefinite period.
- Documentation: NRIs need overseas residential proof, while OCI cardholders require various documents proving Indian origin and relationship evidence.
In conclusion, this article serves as a comprehensive guide to distinguish between NRIs and OCIs, covering eligibility, investment options, taxation, residency, and documentation requirements. The information provided here is valuable for individuals seeking clarity on their status and financial implications.
