Q.897 OCI vs NRI difference in

tax rules . . .

Dear Sir I wanted to understand if there was any difference in tax rules between NRI and OCI. ALso, if you could guide me to tax rules for an OCI in Austria, i would be much obliged. best regards Vivek Answer: The difference between NRI and OCI is that while NRIs are Indian citizens living abroad for various reasons, an OCI holder is a foreign citizen who has been granted a lifetime visa for India along with some specified benefits that the government of India has announced or may announce in the future. From a tax prospective the difference between NRI and OCI is basically the same as both are generally taxed on income from Indian sources while their foreign income is exempted from Indian taxes. Both NRIs and OCIs interest income in NRE bank accounts is exempt from Indian taxes. OCIs residency period in India does play a part at some point of time. OCI holders settled in India would not have their foreign income taxed in India for a period of time where they qualify for ROR status. Once their ROR status expires then their foreign income may become taxable in India, subject to the Double Tax Avoidance Agreements in effect. Similarly, an NRI once they lose their NRI status, they would be taxed in India on their world wide income. For more information on this subject use the NRI Taxation Quick links page NRI Taxation - Quick Links >> As far as your question on ‘tax rules for an OCI in Austria’ taxation rules for OCI are the same in India regardless of which country an OCI holder belongs to. The only difference would be the DTAA agreement between various countries and India. In your case, OCI tax rules keeping in mind the India/Austria DTAA would apply.