Every January, as NRIs return home to Rajkot for the holidays, Ashutosh Financial Services notices the same questions surface again and again: Am I still an NRI under Indian law? Do I owe tax in India, in the US, or in both? What happens to my old bank accounts, my PPF, my property? These aren’t small technicalities — they shape real financial decisions for thousands of families living abroad. It’s this recurring need for clarity that led Ashutosh Financial Services to hold a dedicated session on NRI taxation, laws, and investment, because informed decisions can only be made when people understand the rules that govern their money across borders.
On 2nd January 2018, Ashutosh Financial Services organised this session in Rajkot for an audience of Non-Resident Indians, many of whom were visiting home during the winter break — a natural time to review finances before returning abroad. The session was led by Daxesh Kothari, who walked attendees through a subject that sounds straightforward but is anything but: figuring out who actually qualifies as an NRI, and what that status means for taxes, investments, and everyday banking.
The session opened with a fact that surprises many people: India doesn’t have one single definition of “NRI.” The Income Tax Act decides residency by counting days spent in India each year, generally treating someone as a resident if they’re present for 182 days or more, with a lower threshold in certain cases. FEMA, the law governing foreign exchange, looks instead at intention — whether a person has gone abroad with the purpose of staying for an uncertain period. The Citizenship Act works on an entirely different basis, tied to birth and registration. A person can easily be a resident under one law and a non-resident under another, which is why NRIs are often confused about which rules apply to a given transaction. The session also covered Overseas Citizen of India and PIO cards, clarifying that holding an OCI card does not amount to dual citizenship, even though it does allow lifelong visa-free entry and near-parity with resident Indians in financial matters.
On the tax side, the core idea explained was the difference between the “residence rule” and the “source rule.” A resident of India is taxed on global income, while a non-resident is taxed only on income earned or received in India — rental income, capital gains on Indian property, or interest from certain accounts. This becomes complicated when someone qualifies as a tax resident of two countries at once, which happens often with NRIs who hold a US Green Card or meet America’s Substantial Presence Test while also meeting India’s residency conditions. In such cases, the India-US tax treaty steps in with a sequence of tie-breaker tests — starting with where the person’s permanent home is, and moving through their centre of vital interests, habitual abode, and nationality — to decide which country gets to treat them as a resident for tax purposes. Once that’s settled, taxes paid in the “source” country can usually be claimed as credit in the “resident” country, so income isn’t taxed twice.
The session also addressed the everyday mechanics NRIs deal with: interest earned in an NRE account is exempt from Indian tax, while NRO account interest is fully taxable; capital gains on Indian property sold by an NRI attract tax deduction at source, though exemptions are available under sections like 54, 54EC, and 54F if the proceeds are reinvested in a new house or specified bonds. Attendees also learned about the Liberalised Remittance Scheme, which lets resident Indians send up to USD 250,000 a year abroad — useful for supporting NRI family members, medical treatment, or education. A particularly timely topic was the tightening of PPF rules for NRIs: accounts opened while still resident can no longer be continued once someone becomes non-resident, and existing accounts are deemed closed, with proceeds needing to move through NRO and NRE accounts before being reinvested elsewhere.
The presentation closed with a look at why India remains an attractive place to invest despite all this complexity — GDP growth rates in India were shown running well ahead of developed economies like the US, UK, and Germany, and even ahead of most other major emerging markets, making equity markets and mutual funds a more compelling long-term option than real estate, which the session noted has struggled with liquidity and transparency issues in recent years. The final segment introduced FATCA, FBAR, and the Common Reporting Standard — the international frameworks under which countries now share financial account information — reminding attendees that compliance obligations don’t end at India’s borders.
Sessions like this reflect a simple belief: that financial confidence comes from understanding the rules, not just following them blindly. Ashutosh Financial Services continues to organise these educational initiatives because navigating cross-border finance shouldn’t require guesswork, and a well-informed NRI community is better placed to protect and grow what they’ve worked hard to build.
