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Definition of Residential Statuses: Resident, RNOR, NRI, PIO

From the point of view of Income Tax (IT), a person can have different “resident” statuses: Resident, Resident but Not Ordinary Resident (RNOR), Non Resident Indian (NRI) and Person of Indian Origin (PIO).

This article defines these statuses, and explains the difference between each.



From time to time, we keep hearing terms like Resident, NRI, RNOR and PIO. What do these mean?

You have lived in India all your life and go to another country for work. Do you know that after a certain period, your residential status changes?

Similarly, do you know that if you have been away from India for a while, and come back to India, your residential status changes?

What is the status of kids born to Indian parents in foreign countries? What is their resident status for India?

Let’s understand all the residential statuses to get an answer to these questions.

Resident Indian

In simple terms: A person residing in India is called a Resident Indian.

Here’s the definition:

A person is a Resident Indian for a given financial year if he / she fulfills the following conditions for that financial year:

(Do not understand terms like Financial Year and Assessment Year? Please read “Income Tax (IT) Jargon – Financial Year (FY), Assessment Year (AY) and Previous Year (PY)”)

1.
- He / she is in India in that year for 182 days or more (This irrespective of whether the stay is a continuous period of 182 days, or in multiple parts) OR

- In the 4 years preceding that year, he / she has been in India for a total of 365 days or more AND has been in India for 60 days or more in that year. (Again, this irrespective of whether the stay is a continuous or in multiple parts)

2. He / she is in India for more than 182 days in at least nine out of the ten previous years

3. He / she is in India for a total of 730 days or more during the seven previous years


Resident but Not Ordinary Resident (RNOR)

In simple terms: A person residing in India, but who has been an NRI in some previous years is called a Resident but Not Ordinary Resident.

Here’s the definition:

A person is a Resident but Not Ordinary Resident (RNOR) for a given financial year if he / she fulfills the following conditions for that financial year:

(Do not understand terms like Financial Year and Assessment Year? Please read “Income Tax (IT) Jargon – Financial Year (FY), Assessment Year (AY) and Previous Year (PY)”)

1.
- He / she is in India in that year for 182 days or more (This irrespective of whether the stay is a continuous period of 182 days, or in multiple parts) OR

- In the 4 years preceding that year, he / she has been in India for a total of 365 days or more AND has been in India for 60 days or more in that year. (Again, this irrespective of whether the stay is a continuous or in multiple parts)

2.
- He / she is in India for more than 182 days in les than nine out of the ten previous years OR

- He / she is in India for less than a total of 730 days or more during the seven previous years


Non Resident Indian (NRI)

In simple terms: A Non Resident Indian (NRI) is an Indian Citizen, who stays outside India for an uncertain duration of stay.

Here’s the definition:

A person is a Non Resident Indian (NRI) for a given financial year if he / she fulfills any of the following conditions for that financial year:

(Do not understand terms like Financial Year and Assessment Year? Please read “Income Tax (IT) Jargon – Financial Year (FY), Assessment Year (AY) and Previous Year (PY)”)

1. He / she is in India in that year for 182 days or more (This irrespective of whether the stay is a continuous period of 182 days, or in multiple parts)

2. In the 4 years preceding that year, he / she has been in India for a total of 365 days or more AND has been in India for 60 days or more in that year. (Again, this irrespective of whether the stay is a continuous or in multiple parts)

Note: A Hindu Undivided Family (HUF) is considered a Non Resident in a year if its management is done from outside India during that year.

Person of Indian Origin (PIO)

(Note: The Income Tax (IT) Act doesn’t define a PIO)

In simple terms: A person is called a “Person of Indian Origin” (or PIO) if he / she was ever a citizen of India, or if he / she has roots in India.

Here’s the definition:

For opening a bank account and investing in Indian stock markets

A person is called a “Person of Indian Origin” (or PIO) if:

1.
He / she is a citizen of any country other than Pakistan / Bangladesh

2.
- He / she held an Indian passport at any time OR
- Either of his / her parents or any of his / her grand parents were a citizen of India OR
- He / she is a spouse of an Indian citizen or a spouse of a person whose parents / grand parents were a citizen of India


For property transactions

A person is called a “Person of Indian Origin” (or PIO) if:

1.
He / she is a citizen of any country other than Pakistan / Bangladesh / Afghanistan / Bhutan / Sri Lanka / Nepal / China / Iran

2.
- He / she held an Indian passport at any time OR
- Either of his / her parents or any of his / her grand parents were a citizen of India

(Are you an NRI / PIO and want to know about Permanent Account Number (PAN)? Please read “Permanent Account Number (PAN) for an NRI and a PIO”)

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  1. SUnil Bhadauriya says:

    After reading the definition of PIO and NRI I am confused about my status of being PIO or NRI.

    I am out of India since last 7 years.
    I visit India every year to visit my parents.
    I married in India. My wife is an Indian.
    I have indian passport. I dont have citizenship of any other country.
    But I have not been in India in this year for 182 days or more (This irrespective of whether the stay is a continuous period of 182 days, or in multiple parts)
    Neither: In the 4 years preceding to this year, ever been in India for a total of 365 days or more AND has been in India for 60 days or more in this year. (Again, this irrespective of whether the stay is a continuous or in multiple parts)

    So am I NRI or PIO?

  2. Anonymous says:

    hi Sunil,

    You are an NRI.

    PIO is used primarily for people who do not hold Indian passports, but have deep links with India.

    Since you have an Indian passport, you are an NRI.

  3. Hi Dhaval,

    No, you wouldn’t have to file an income tax return in this case.

  4. Sir,
    I am a nri. If i will have income generated within tax exemption limit then i will have to return file or not

  5. Sir,
    I left india for employment purpose this year so I will be considered nri for the next assessment year.
    I did not file my IT return last year. My last company already deducted TDS. I will come India next year.Can I file that last year return to next year(after 2years) . Any late charge they will take. Also let me know upto how many years IT return/documents incometax offficer can ask legally. I heard upto 4years. Is this true.Also let me know I am a nri & my wife is nonnri. If anybody of us will have income generated in india within tax limits individually then it is needed or not needed of tax return whether he/she is nri or not nri.
    Please clear me all these issues.
    Also let me know can i return IT file online or you can help me
    Thanks
    Dhaval

  6. Dear Sir,

    If I stay abroad for 183 day (30 Sept-09 to 31 March-10) and stay in India 182 day(1st April-09 to 29 Sept-09), what will be my status as per Indian Income Tax law?
    Whether i will be NRI & my Income will exempted from IT or not?

    Rdgs

    Moti

  7. Hi Dhaval,

    All information about late filing can be found here: Missed the income tax return (ITR) filing deadline of 31st July

    I recommend you keep a record of past IT returns and related documents for 10 years.

    If the incomes are below the taxable limit, you do not need to file IT returns.

    You can file returns online or through CAs, etc. Currently, I do not provide income tax return filing service – thanks for asking, though.

  8. Hi Moti Singh,

    You would be an NRI in this case.

  9. Dear sir
    I am Indian but have british nationality.I lived in Uk between 23-33 years and i got uk nationality. I have been living in India for the past 5 years. My kids are 7 yrs and 9 yrs old. they have got Uk passports.Will i be considered resident Indian
    Can my kids apply for medicine and engineering in the general quota(not NRI) as they have been here >5yrs

    Thanks

  10. Ajit Vajapeyam says:

    I an RNOR. Returned to india in 2009 oct.Do i have to pay tax on NRE S/Baccount interset and NRE F/D maturing in 2009.Please let me know whether NRE accounts of RNOR are taxable.

  11. Krishnakumar v says:

    I was an NRI for more than 15 years. Now I amback to my home town an settled since 17th July 2010. I wanted to know whether I am a resident or NRI.
    I wanted to register my name in the voters list and the last date of registering is 21st of November, 2010. When I visited the village office they said at least I have to complete six months in India to get the residential status otherwise I am not eligible.
    Please explain the details, if I declare that I am not going back abroad can I get a residential certificate to register in the voters list.
    Thanks and regards,

  12. i left india on 30 june 2009 to take up a job in Europe and contnue to saty in Europe excpet for few short visits of less than few weeks. Now what will be my status NRI or resident. I want to buy some agricultural land in India. Can buy agricultural land without any restrictions?

  13. i have a project to do for that i need information from. The project is on RETIRED NRI’s . I dint get information. Plz help me. I have to write one page introduction so plz provide me information about it plz. I have to submitte the project proposal tomorrow (28-11-2011) so plz by tom evening provide me the information on my topic please.

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