Q.1159 What is the status of OCIs settled in India permanently?

Question: -OCIs are entitled to the privileges of NRIs (with a few exceptions.), however, the problem arises due to the fact that an OCI resident in India is not a non-resident. So, if a resident OCI wishes to invest in, say a mutual fund, he can neither invest as a resident Indian citizen as he is not an Indian citizen nor as an NRI as he is not a non-resident. What is the status of a resident OCI in such cases? -Some KYC application forms have a column asking for the Nationality of the applicant. What is the nationality of a resident OCI? Is nationality in this context same as citizenship? -Some KYC application forms have a column for citizenship. It further asks for residential status as resident individual, NRI, PIO and Foreign National. No combination conveys an OCI resident in India unless PIO and Resident Individual both are allowed (which I don’t think is allowed). Again, what is the right option for a resident OCI? -Is a resident OCI an Indian national for the purpose of railway booking, hotels, parks entrance etc? They provide only two options, Indian and Foreigner. The moment you say Foreigner, you are asked for the copies of passport, visa and what not and asked to pay rates applicable to foreigners. What is the right thing for a resident OCI to do? Answer: Regarding your questions: OCI holders residing in India continue to be treated as NRIs and not as Indian citizens. OCI holders to be considered Indian citizens must apply for Indian citizenship after completing the residency requirements in India. Until an OCI holder obtains Indian citizenship, he/she will enjoy the same privileges of Indian non-residents (NRI). A person due to the duration of stay in a country become a resident of that country for tax purposes, however they do not become citizens of that country.

Investment in mutual funds by OCI holders

OCIs can invest in mutual funds as a non-resident. Overseas Citizens of India (OCI) and Persons of Indian Origin (PIO) are treated on par with Non Resident Indian (NRIs) o Remember banks, mutual funds, demat participants, brokers, insurance companies and other financial Institutions must now follow the reporting requirements of FATCA/CRS. All accounts such as Savings/Current bank accounts, Cash Credit/Overdraft, FD/ Term Deposits, Annuity, Whole Life Insurance Policies; PIS, demat/trading accounts as well as Mutual Fund investments must be reported to comply with the law. With the current reporting requirements under FATCA and CRS some mutual funds may even be reluctant to accept investments from US citizens. FATCA reporting applies to US citizens and CRS applies to US and all other signatory countries. My understanding is that for KYC purposes: o NRI relates to Indian citizens who are non-resident and living abroad. o PIO refers to foreign citizens who are persons of Indian origin. Links to Indian origin are for example established through grandparents, parents etc being Indian citizens at some point of time. OCI holders are PIOs as they hold foreign passports and are of Indian origin. o Foreigner is a person who is not an Indian citizen and not a person of Indian origin.

Discounts for OCI on railway bookings etc. in India

OCI holders in India are considered at par with Indian non-residents. Railways previously offered discounts for senior citizens for train travel within India. However, this benefit no longer applies to foreigners and NRIs. Hence OCIs are also not eligible. The only benefit in this category that I am aware of is that OCIs get: 1. Parity with resident Indian nationals in matters of tariffs in domestic air fares. 2. Parity with domestic Indian visitors in respect of entry fee for visiting national parks and wildlife sanctuaries in India. 3. Parity with non-resident Indians [NRI] in respect of Entry fees for visiting the national monuments, historical sites and museums in India.
Information by Virendar Chand
Disclaimer: Information provided is for general knowledge only and should not be deemed to be professional advice. For professional advice kindly consult a professional accountant, immigration advisor or the Indian consulate. Rules and regulations do change from time to time. Please note that in case of any variation between what has been stated on this website and the relevant Act, Rules, Regulations, Policy Statements etc. the latter shall prevail. © Copyright 2006 Nriinformation.com
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Disclaimer: Information provided is for general knowledge only and should not be deemed to be professional advice. For professional advice kindly consult a professional accountant, immigration advisor or the Indian consulate. Rules and regulations do change from time to time. Please note that in case of any variation between what has been stated on this website and the relevant Act, Rules, Regulations, Policy Statements etc. the latter shall prevail. © Copyright 2006 Nriinformation.com
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Q.1159 What is the status of

OCIs settled in India

permanently?

Question: -OCIs are entitled to the privileges of NRIs (with a few exceptions.), however, the problem arises due to the fact that an OCI resident in India is not a non-resident. So, if a resident OCI wishes to invest in, say a mutual fund, he can neither invest as a resident Indian citizen as he is not an Indian citizen nor as an NRI as he is not a non-resident. What is the status of a resident OCI in such cases? -Some KYC application forms have a column asking for the Nationality of the applicant. What is the nationality of a resident OCI? Is nationality in this context same as citizenship? -Some KYC application forms have a column for citizenship. It further asks for residential status as resident individual, NRI, PIO and Foreign National. No combination conveys an OCI resident in India unless PIO and Resident Individual both are allowed (which I don’t think is allowed). Again, what is the right option for a resident OCI? -Is a resident OCI an Indian national for the purpose of railway booking, hotels, parks entrance etc? They provide only two options, Indian and Foreigner. The moment you say Foreigner, you are asked for the copies of passport, visa and what not and asked to pay rates applicable to foreigners. What is the right thing for a resident OCI to do? Answer: Regarding your questions: OCI holders residing in India continue to be treated as NRIs and not as Indian citizens. OCI holders to be considered Indian citizens must apply for Indian citizenship after completing the residency requirements in India. Until an OCI holder obtains Indian citizenship, he/she will enjoy the same privileges of Indian non-residents (NRI). A person due to the duration of stay in a country become a resident of that country for tax purposes, however they do not become citizens of that country.

Investment in mutual funds by OCI

holders

OCIs can invest in mutual funds as a non- resident. Overseas Citizens of India (OCI) and Persons of Indian Origin (PIO) are treated on par with Non Resident Indian (NRIs) o Remember banks, mutual funds, demat participants, brokers, insurance companies and other financial Institutions must now follow the reporting requirements of FATCA/CRS. All accounts such as Savings/Current bank accounts, Cash Credit/Overdraft, FD/ Term Deposits, Annuity, Whole Life Insurance Policies; PIS, demat/trading accounts as well as Mutual Fund investments must be reported to comply with the law. With the current reporting requirements under FATCA and CRS some mutual funds may even be reluctant to accept investments from US citizens. FATCA reporting applies to US citizens and CRS applies to US and all other signatory countries. My understanding is that for KYC purposes: o NRI relates to Indian citizens who are non-resident and living abroad. o PIO refers to foreign citizens who are persons of Indian origin. Links to Indian origin are for example established through grandparents, parents etc being Indian citizens at some point of time. OCI holders are PIOs as they hold foreign passports and are of Indian origin. o Foreigner is a person who is not an Indian citizen and not a person of Indian origin.

Discounts for OCI on railway bookings

etc. in India

OCI holders in India are considered at par with Indian non-residents. Railways previously offered discounts for senior citizens for train travel within India. However, this benefit no longer applies to foreigners and NRIs. Hence OCIs are also not eligible. The only benefit in this category that I am aware of is that OCIs get: 1. Parity with resident Indian nationals in matters of tariffs in domestic air fares. 2. Parity with domestic Indian visitors in respect of entry fee for visiting national parks and wildlife sanctuaries in India. 3. Parity with non-resident Indians [NRI] in respect of Entry fees for visiting the national monuments, historical sites and museums in India.
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