Do you know the difference between an NRI and a PIO?

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Anytime talk veers to the topic of the Indian diaspora, you hear terms like NRI and PIO to describe Indians living abroad. But don’t make the mistake of assuming that they are synonyms. There are clear differences between NRIs and PIOs. Let’s find out what these are.

Who is an NRI?

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NRI stands for ‘non-resident Indian’. So, an NRI is a person who holds an Indian passport but does not reside in India at present. They may have moved abroad temporarily or permanently. But they have chosen not to give up their Indian residency.

Who is a PIO?

PIO stands for ‘person of Indian origin’. The term is applied to an Indian-origin person living abroad provided any of the following circumstances are met:

  • The person held an Indian passport at some point of time. Perhaps they held an Indian passport but surrendered it upon migrating to a new country and got a passport issued in the new country.
  • The person was born in India.
  • The person’s parents or grandparents were born in India.
  • The person is married to an Indian who holds a valid Indian passport.

A PIO is someone who does not currently have an Indian passport. They may or may not be residing in India.

NRIs vs. PIO: The key differences

Listed below are the key points of difference between an NRI and a PIO:

  • Passport: An NRI holds an Indian passport. A PIO does not hold a passport issued by the Government of India.
  • Visa: An NRI never needs a visa to enter India. A PIO may need a visa to enter the country. A PIO may also use their PIO card as a lifelong Indian visa during visits to the country.
  • Voting rights: An NRI is free to cast his vote during elections in India. This right is not extended to a PIO.

Financial rules related to NRIs and PIOs

When it comes to financial transactions in India, NRIs and PIOs enjoy a similar status. The rules and restrictions are similar for both groups.

  1. Bank account

As an NRI or a PIO, you can open any of the following types of banking accounts:

  • Non-resident external (NRE) account: This allows you to hold overseas earnings in Indian rupees. It makes repatriation of the money to India simpler. If you want a joint account, the other accountholder would have to be an NRI or a PIO.
  • Non-resident ordinary (NRO) account: Such an account is used to deposit earnings in India (e.g. rental income from a property in India, dividends earned in India). If you want to open a joint account, you can do so only with a close relative who is a resident Indian.
  • Foreign currency non-resident (FCNR) account: This can only be used as a fixed deposit account. It holds foreign currency that is easily convertible.

NRIs and PIOs can open these accounts at any private or public sector Indian bank.

  1. Stock market investments

The markets in India offer lucrative investment opportunities. Both NRIs and PIOs can get in on the action. They are permitted to invest money in the Indian stock markets. As an NRI or a PIO, you can send money to India through your NRE, NRO, or FCNR account. If required, you could carry out any trades and investments through a trusted stockbroker. There is no restriction on the investments carried out.

  1. Buying property

NRIs and PIOs cannot buy agricultural land in India. But they are free to purchase a residential or a commercial property in India. They can also put the property on rent and earn an income from it. When buying real estate in India, you will need to pay in Indian rupees. You could send money overseas to your bank account in India through a trustworthy remittance service like Axis RemitMoney.

Wrapping up

As you can see, the main differences between NRIs and PIOs lie in their citizenship status and the type of passport they hold. On the other hand, when it comes to financial rules and restrictions, both NRIs and PIOs are treated in much the same way.

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