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To fall under the NRI category, you have to be a Person of Indian Origin (PIO), or an Indian citizen living abroad. Your stay in India should be more than 60 days, but less than 182 days in a given financial year. Subject to fulfilling this, even if your stay in India is 365 days, or more, in the previous four financial years, you will still be regarded as an NRI. You can also have NRI status, if you are deputed to a foreign country for more than six months.
As an NRI, you can invest in stock markets after opening a Non-Resident External (NRE) Account with an RBI-approved bank or you can only have a single PIS Account for investing in stock markets.
NRE account is an external and repatriable account. The money which you deposit in this account gets converted in India Rupees which means you can deposit money in any currency, and withdraw in India Rupees. You can open an NRE Account in different formats, like savings, current or recurring deposits which are also subject to currency fluctuations.
A key difference between NRE and NRO Accounts is that the latter does not allow free repatriability. An NRO Account is best suited for NRIs having sources of income in India. The government has mandated opening NRO Account as depositing money earned in India would result in a tax-free transfer of money outside the country.
According to recent government regulations, you don’t require a Non-Resident Ordinary (NRO) Account for investing in stock markets through the PIS because any investment made through an NRO Account will be regarded as an investment by a resident Indian.
To invest in Indian stock markets, you need to follow the below steps:
Just like a bank account for resident Indians, the PIS Account holds the investment amount of NRIs and is linked with the Demat Account and Trading Account.
Thus, as an NRI, you can invest in Indian stock markets through the RBI-regulated platform of PIS. Before investing in Indian stock markets, opening an NRI trading account with a trusted financial partner is very important. IIFL’s award-winning NRI financial advisory services provide you with a wide range of investment options along with dedicated relationship managers and a hassle-free online account opening process.
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