Persons of Indian Origin (PIOs) are entitled to open bank accounts and avail themselves of the same benefits as other Non-Resident Indians (NRIs). Both NRIs and PIOs enjoy similar advantages, such as tax deductions, the right to stay in the country, and permission to visit, among others.
It's important for individuals falling into either category and residing outside India to understand the difference between NRIs and PIOs when opening a bank account in India. In this article, we will understand the difference between NRI and PIO, their meaning, full form and eligibility.
Who is an NRI?
Indians residing in India for 182 days in the previous year or 365 days in the last 4 years are known as Indian residents. Indians living in any other foreign country are known as non-resident Indians.
NRIs can open a bank account in India, and buy property in India, but cannot perform some activities in India. These people must be Indian citizens and must be of Indian origin. NRIs are also eligible to vote during elections. Many banks and financial institutions allow the opening of NRI accounts in India.
What are the types of NRI Accounts?
There are 3 major types of NRI accounts in India -
Non-resident Ordinary (NRO) Account - This account helps save and maintain the income earned in India. You can maintain your income earned, rent, and dividends.
Non-Resident External (NRE) Account - This account helps maintain funds received from the foreign country where the NRI resides. The foreign currency deposited is converted to Indian currency and saved in the NRE account.
Foreign Currency Non-Resident (FCNR) Account - NRIs can maintain FCNR accounts. They can deposit foreign currency in this account.
Given below are some of the benefits of an NRI account -
NRI accounts offer convenient money management for Non-Resident Indians both in and outside of India.
Opening an NRI account is a straightforward process, even for NRIs residing abroad.
Furthermore, NRI accounts provide tax benefits, aiding account holders in minimizing their tax obligations in India.
Who is a PIO?
PIO or Person of Indian Origin is an individual who is Indian by birth and has a family of Indian origin. In other words, people residing in other countries having Indian citizenship and who have Indian parents or grandparents.
PIO cards are issued to individuals who qualify for being called PIO. The PIO cardholders can stay in India for the purpose of working, studying, or visiting India for upto 15 years from the date on which it is issued. A person can be called a PIO if they have any of the below qualifications -
Hold an Indian passport
Have parents or grandparents who are Indian
Their spouse must be a citizen of India without being a citizen of Bangladesh or Pakistan.
Here are the benefits of a PIO card -
They can visit India without a visa for upto 15 years from the date of issue.
PIO cardholders are allowed to stay in India for upto 180 days without registration to FRRO.
Such people can study or work in India without any visa.
They enjoy the same financial and economic benefits as provided to NRIs.
What is the Difference Between NRI and PIO?
Basis | Non-Resident Indian (NRI) | Person of Indian Origin (PIO) |
Meaning | NRIs are also called Indian Diaspora. They are Indian citizens but ordinarily reside outside India. | Persons of Indian origin are also known as overseas Indians. Here are the criteria for becoming a PIO -
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Eligibility Criteria | An individual who stays in India for 182 days or more during a year. Or if they stayed in India for 60 days or more in the previous year and stayed for a total of 365 days or more in the four previous years. | PIO cardholders don’t need a visa for upto 15 years for issuing PIO cards. They can stay in India for upto 180 days without being registered with FRRO. |
Voting rights | They have voting rights in India | They do not have any voting rights. |
Eligibility for Public Offices | They are eligible to hold public offices. | They cannot hold public offices in India. |
Authority | They don’t need permission to visit restricted places in India. | They need to receive permission from FRRO to visit restricted places in India. |
Where can PIOs and NRIs Invest in India?
There are various investment options available to NRIs and PIOs in India. Given below are some of them -
Deposits - Both NRIs and PIOs can invest money through deposits in bank accounts like NRE, NRO, and FCNR that are available for them.
Repatriation - NRIs and PIOs can claim income tax deductions on the repatriation of 1 million USD per year on the NRO account.
Investment on repatriation - Investments can be made on the basis of repatriation, like treasury bills, FDI, bonds, and domestic mutual funds.
Investment on non-repatriation - They can also make investments on a non-repatriation basis like chit funds, postal savings, and money market mutual funds in India.
Immovable Property - They can also invest in immovable properties other than agricultural properties and farmhouses.
Transmission of Inheritance - They don’t need permission to transmit an inheritance to a legal heir of the property.
Housing Loans - NRIs and PIOs can get housing loans to purchase property in India.
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