NRI Full Form

An Indian Citizen who stays abroad is an NRI. We come across this word frequently, especially when you visit the bank to open an account or any other transaction. There will be a column in the application wherein you must mention whether you are an NRI. So what is the NRI Full Form? Have you ever given it a thought? A person who is an Indian Citizen and lives in India is a Resident Indian, and an India Citizen who stays abroad is an NRI. The NRI fullform is Non-Resident Indian.

In this article, you will learn about the various rules stipulated for NRIs in terms of opening bank accounts, carrying out financial transactions, remittance of funds, etc.

As per the Income Tax Act, an individual is considered an NRI in the following cases.

• The person has not resided in India continuously for 182 days during a financial year.
• The person has not stayed in India for 60 days in the financial year and has not resided in India continuously for 365 days in the last four years.
• A person who has migrated out of India for employment
• A person who is residing abroad and running a business establishment there
• A person staying out of India for an indefinite period for any other purpose and has indicated the purpose of the stay

• Employees of the Public Sector posted abroad.
• Representatives of Central/State Government living abroad
• Indian Citizens working abroad in institutions like World Bank, International Monetary Fund, UNO etc
• Indian citizens abroad for further studies have jobs or businesses abroad.

• Capitals gains on the sale of property in India
• Remuneration is received for services rendered in India, termed global income.
• Income by way of rent from property owned in India.
• Interest on Fixed Deposit and Savings Bank Account.

NRIs have various investment options in India, similar to resident Indians. Many NRIs opted for a fixed deposit, which is a no-risk investment. There are various types of fixed deposit accounts that are provided for NRIs by banks/financial institutions. They have the option for investment either in Indian Rupees or foreign currency that is accepted for opening deposit accounts.

NRE Fixed Deposit/Savings Bank Account

These accounts for NRIs can be opened only with foreign inward remittance. The credits to this account will be only by way of remittance in foreign currency from abroad, which will be converted to Indian Rupees. The account will be maintained only in India Rupees.

Cash remittance is not permitted to this account. The credits to the NRE SB account can also be by way of interest earned on NRE accounts maintained at other banks/financial accounts. The maturity proceeds of the NRE account and the amount in NRE SB accounts are repatriable.

The interest earned on these accounts is not taxable in India.

These accounts can be opened jointly with a resident Indian who is a close relative of the NRI. The resident Indian can be authorised to operate the account as well.

NRO Fixed Deposit/Savings Bank Account

These accounts can be for income earned on investments made in India. For instance, the rental income earned on properties owned in India can be credited to this account. Cash remittance is also permitted to these accounts.

The funds in NRO accounts are not repatriable and can be used only for local payments. However, the interest earned on these deposit accounts is fully repatriable. The interest earned on these deposits is taxable in India.

FCNR Deposit

This deposit will be by way of foreign inward remittance but will be maintained in foreign currency. Both deposit and withdrawal will be in foreign currency. There will be no risk of exchange fluctuation in this deposit.

RFC Account

NRI full form, i.e., Non-Resident Indians who return to India can have invested funds abroad and want to bring it back to India can invest the funds in RFC Account which will be maintained in foreign currency. 

The income on this account is not taxable in India until the individual maintains the status as Resident-But Not Ordinary.

Investment in Insurance is made possible for NRIs by several insurance companies in India. But the rules and regulations are different from those specified for Resident Indians.

• The term of the policy can be from 6 months to 25 years, and the investment can be made by the age group of 18 to 60 years. However, the policy is limited to the terms and conditions specified.
• The initial payment will depend on factors like terms of policy, sum assured, premium payment regulation and the riders chosen by the policyholder.
• The minimum sum assured will be in lakhs and can go up to crores.
• The proceeds of the policy will be paid to the nominee in case of any eventuality.
• There is a provision for renewal of the policy on maturity under certain schemes if the policyholder desires so. A medical test as per the terms of the insurance company has to be undergone by the policyholder. Also, this benefit will be provided only for policyholders who have not delayed or defaulted on earlier premium payments.
• The NRI policyholder can make the premium payment through net banking. The policyholder should hold an account in a bank that permits access to internet transactions relating to the respective insurance company premium payments.
• Tax benefit under Section 80D of the Income Tax Act 1961. However, some countries may charge interest on the maturity proceeds of the Insurance Policy.

This article has imparted knowledge about the NRI Full Form and also the various investment options available for NRIs in the country. The rules and regulations in respect of investment in deposits as well as Insurance are also discussed. You will also get awareness about the Income Tax Rules in this article. So NRIs with the available information can make a prudent decision about their investments. They can choose the investment option that is best suited for them.