Overseas Citizen of India or OCI refers to the status accorded to persons of Indian origin or PIOs with foreign citizenship. Indian authorities grant OCI status only to foreign citizens meeting certain criteria.
Persons entitled as the Overseas Citizen of India are provided with an OCI Card and they enjoy certain rights and privileges similar to those of the Residents and Non-Residents. However, there are certain restrictions as well. In March 2021, the Government made some changes in OCI Rules.
In this article, we will throw light on all these aspects along with the taxation rules for OCIs and the difference between OCI status and NRI.
Overseas Citizen of India: Eligibility Criteria
The Ministry of Home Affairs defines Overseas Citizen of India (OCI) as any foreign citizen who satisfies any of the following conditions:
- Is or is eligible to become an Indian Citizen on or after 26th Jan 1950.
- Belongs to the territory that became part of India on 15th August 1947.
- Is a child, grandchild, or great grandchild of such citizens.
- Minor Child of all the persons mentioned above or whose one or both parents are Indian citizens.
- Married to an Indian Citizen or an OCI for at least two years and the marriage is registered.
The person or his/her ancestors are Citizens of Pakistan and Bangladesh or any other such country as notified by the Central Govt. are not eligible to get the Overseas Citizenship of India.
Please note here, in case of the re-marriage of the OCI cardholder, he/she needs to submit a fresh application. The existing OCI registration will be immediately cancelled.
How to apply for Overseas Citizenship or OCI Card?
The application for Overseas Indian Citizenship can be made online. You need to visit https://ociservices.gov.in/ to apply for the same.
Documents such as proof of Citizenship (valid Passport), Evidence of Address, Long Duration Visa (if the application is made from India). Please note, if you are holding a tourist/ missionary/ mountaineering visa, you are not eligible to register as the Overseas Citizenship cardholder in India.
For details of other documentation and formalities as per different situations, please visit this link.
If applied from India, the application fee is Rs. 15,000 and if applied from a foreign country, it is $275, payable by way of Demand Draft in the favour of the Ministry of Home Affairs. This cost is as of September 2021.
As per New OCI Rules, before applying for the OCI card it is mandatory for the applicant to stay in India or in any other country for a continuous period of 6 months.
Also, if the card is issued to persons above 20 years of age, re-issuance is not required until they are 50. Single re-issuance is required after that. But persons below 20 years have to reissue the card each time a new passport is issued to them until they turn 20. It can also be done online and a renewal fee of $25 shall be charged.
Overseas Citizen of India: Benefits
Overseas Citizens of India or OCI cardholders are entitled to various benefits. Prominent ones are mentioned below:
- Multiple entries and life long visa to visit India, without any restriction.
- OCIs need not take any special permission from the Foreigners Regional Registration Officer or Foreigners Registration Officer for any length of stay in India. However, as per new OCI Rules, for carrying out the following activities, the OCI cardholder has to take special permission from the FRRO or the Indian Mission concerned, to:
- conduct research;
- be involved in any Missionary, Tablighi, Mountaineering or Journalistic activities;
- take up internship or employment in any foreign Diplomatic Missions or foreign government organisations in India;
- visit any place which falls within the Protected, Restricted or Prohibited areas as notified by the Central Government or competent authority.
- OCIs would be charged the same domestic air fares, fees for visiting national parks, museums, monuments, etc. as charged from residents.
- Just like NRIs, OCIs are allowed to adopt any Indian children and bring the child to the country of residence.
- OCIs can pursue professions like- Doctors, Nurses, Chartered Accountants, Advocates, Architects, etc. in India. They can also be appointed as a teaching faculty at IITs, IIMs, AIIMS and other central universities.
- All other rights and privileges as available to NRIs in Financial, Economic, and Educational fields.
(Also Read: Students Studying Abroad: when they would be considered NRIs?)
Overseas Citizen of India: Some restrictions
Overseas Citizens are not entitled to-
- Central or State Government Jobs, unless specifically specified for OCIs.
- Be a member of Parliament, Legislative Assembly or Legislative Council.
- Hold any constitutional position like- President, Vice President, Supreme Court or High Court Judge.
- Purchase Agricultural Land, Farmhouse, or Plantations in India.
Can OCI cardholder become Indian Citizen?
An OCI cardholder is a foreign citizen given a special status to live and work in India but is not an Indian Citizen. In other words, any person cannot be a citizen of two different countries at the same time.
However, an Overseas Citizen of India can apply for Indian Citizenship, if he or she is a major and has been an OCI cardholder for five years. Also, he or she had resided in India for 12 months prior to applying for citizenship. In some special circumstances, the central government may relax this period by a maximum of 30 days.
OCI vs NRI
Here one thing needs to be clarified that OCI and NRI are two different things.
NRI is a residential status given to an Indian Citizen for tax and/or investments purposes, as per his or her stay in India and the purpose of the same. It is governed by the Income Tax Act and FEMA. (Read: Who is an NRI?)
On the other hand, OCI is an immigration status provided to foreign citizens with roots in India to work and live in India. It is governed by the Citizenship Act,1955.
Although, just like NRIs, Overseas Citizens of India can also open Bank Accounts in India. (Read: All you wanted to know About NRI Bank Accounts)
They are also allowed to invest in Indian financial instruments like- Government Securities, Bonds, Equity and Debt Mutual Funds, NPS, Equity Shares, and other financial instruments as per the guidelines issued by the RBI under FEMA. (Also Read: New NPS withdrawal rules)
In addition, OCIs can also buy and sell immovable property in India and repatriate the sale proceeds upto $1 Million per Financial Year. However, both NRIs and OCIs cannot buy agricultural land in India but can get it as inheritance and can be sold to Indian Residents only. (Also Read: Why is it important to file form 15CA & 15CB while repatriating money outside India?)
Taxation Rules for Overseas Citizens of India:
Taxation would depend upon your residential status and would be governed by the Income Tax Rules. If the Overseas Citizen has spent more than 182 days in a financial year or 365 days out of Preceding 4 FYs and 60 days in the Previous FY, he or she will be considered an Indian resident for tax purposes and needs to file ITR for the Income earned in India and Abroad as well. (Also Read: Why is it important to file ITR on time?)
Tax needs to be paid on the global income (both earned in India and Abroad). However, it is subject to the provisions of the Double Tax Avoidance Agreement (DTAA). Read more on DTAA in this article
If he has spent fewer days than mentioned above, he needs to pay tax and file ITR for Indian income only.
Overseas Citizen of India or OCI is an interesting concept and quite beneficial for the foreign citizens having family in India, and thus keep travelling regularly. With an OCI card, they need not apply for a visa every time. However, they just need to be cautious on the taxation status and spend only that much time in the country which should not make them Indian Residents from the taxation perspective.
OCI rules do not restrict you from working and investing in India. So, those who have plans to collaborate with someone in India for business or professional purposes may also consider this option.