An Indian citizen is eligible for Non-Resident Indian (NRI) status primarily based on their physical presence in India during a financial year. This status is crucial as it determines tax obligations and eligibility for various financial products and investments in India.
Criteria for NRI Eligibility
To be classified as an NRI, an Indian citizen must fulfill one of the following conditions related to their stay in India during a financial year:
Condition 1: Extended Stay Abroad
This condition focuses on the duration an Indian citizen spends outside India.
- Stay Outside India for 183 Days or More: An Indian citizen qualifies as an NRI if they have been outside India for 183 days or more within a single financial year (April 1st to March 31st). This means their stay in India during that specific financial year was less than 183 days.
Condition 2: Limited Stay in India (Alternative Criteria)
Even if an individual does not meet the 183-day rule for staying abroad, they can still be classified as an NRI if their presence in India is sufficiently restricted under these specific cumulative conditions:
- Less Than 60 Days in the Current Financial Year: The individual's total physical stay in India during the current financial year is less than 60 days.
- AND Less Than 365 Days in the Preceding Four Financial Years: Their cumulative stay in India over the four financial years immediately preceding the current financial year is less than 365 days.
Summary of NRI Eligibility Conditions
The table below summarizes the conditions an Indian citizen must meet to be considered a Non-Resident Indian:
| Condition Category | Criteria for NRI Status |
|---|---|
| Extended Stay Abroad | Stays outside India for 183 days or more during the relevant financial year. |
| Limited Stay in India | Stays in India for less than 60 days in the current financial year AND for less than 365 days in the four immediately preceding financial years. |
Understanding Financial Year vs. Assessment Year
In India, a financial year typically runs from April 1st to March 31st. The assessment year is the year immediately following the financial year, during which the income earned in the financial year is assessed for tax purposes. NRI eligibility is primarily determined based on an individual's physical presence during these relevant financial years.
