Legal Definitions
Strictly speaking, the term "non-resident" refers only to the tax status of an person who, as per section 6 of the Income-tax Act of 1961, has not resided in India for a specified period for the purposes of the Income Tax Act. The rates of income tax are different for persons who are "resident in India" and for NRIs. For the purposes of the Income-tax Act, "residence in India" requires stay in India of at least 182 days in a calendar year or 365 days spread out over four consecutive years. According to the act, any Indian citizen who does not meet the criteria as a "resident of India" is a non-resident of India and is treated as NRI for paying income tax.
The Indian government considers anyone of Indian origin up to four generations removed to be a PIO, with the exception of those who were ever nationals of Afghanistan, Bangladesh, Bhutan, Nepal, Pakistan, or Sri Lanka. The prohibited list periodically includes Iran as well. The government issues a PIO Card to a PIO after verification of his or her origin or ancestry and this card entitles a PIO to enter India without a visa. The spouse of a PIO can also be issued a PIO card though the spouse might not be a PIO. This latter category includes foreign spouses of Indian nationals, regardless of ethnic origin, so long as they were not born in, or ever nationals of, the aforementioned prohibited countries. PIO Cards exempt holders from many restrictions that apply to foreign nationals, such as visa and work permit requirements, along with certain other economic limitations.
Read more about this topic: NRI-PIO
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