What is Person Resident Outside India (PROI)? Residential status under FEMA, Income Tax Act explained

A person resident outside India (PROI) has a different residential status under the Foreign Exchange Management Act (FEMA) and Income Tax Act. While the former helps regulate foreign exchange transactions, the latter helps determine the tax liability of such a person.

The main difference is that while FEMA status is based on the purpose or intention of stay, the tax status is based on physical presence or duration of stay. Hence, a person may be PROI under FEMA, but a resident under the Income Tax Act. Also, a person’s residential status under FEMA can change the day (s)he decides to move abroad, while the tax status is decided only at the end of the financial year.

Residential status under FEMA

Any person not resident in India or one who doesn’t meet the criteria of being a ‘resident’ is defined as a PROI, as per Section 2(w) of the Foreign Exchange Management Act, 1999. Hence, a person is regarded as a PROI if (s)he has stayed in India for less than 182 days in the preceding financial year, or leaves the country for employment, business, or any other purpose indicating an intention to stay outside for an uncertain period.


This means that a PROI may or may not be a citizen of India, or be a person of Indian origin, but does not live in India. Hence, a PROI would include non-resident Indians (NRI), overseas citizens of India (OCI), foreign nationals and foreign owned and controlled companies (FOCC), which are Indian entities owned/controlled by non-residents. PROI is a broad term that encompasses NRIs, OCIs and FOCCs. This means that every NRI is a PROI, but every PROI may not be an NRI.

Also read: From tax relief to easier property sales: 5 NRI rule changes

Residential status under Income Tax Act

Under the Income Tax Act, 1961, a PROI’s residential status is determined by his/her physical presence in the country in a given financial year.

Hence, a PROI is regarded as a resident for tax purposes if (s)he stays in India for 182 days or more in the previous financial year, or for 60 days or more in the previous year and 365 days or more in the preceding four years. In the latter case, for an Indian citizen or person of Indian origin visiting India, the number of days will be 182, instead of 60. In case of an Indian citizen or a person of Indian origin with total income (excluding foreign income), exceeding Rs.15 lakh in a financial year, the period of 60 days will be 120 days.

Investment rights

PROIs can invest, open bank accounts and own property in India.

Equity investment: Budget 2026 has expanded the scope of investment for PROIs, proposing that they be allowed to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme (PIS). The individual investment limits in Indian equities has been increased from 5% to 10%, and aggregate PROI limits to 24%.

Property: PROIs (NRI/OCI) can own, hold, or transfer immovable property in India, typically acquired while they were residents or if the property was inherited. However, this excludes agricultural land, farmhouse, or plantation property.

Banking: The Reserve Bank of India (RBI) allows PROIs with business interests in India to open special non-resident rupee (SNRR) accounts through an authorised dealer branch abroad. PROIs can also hold non-resident external (NRE), non-resident ordinary (NRO), and foreign currency non-resident (FCNR) accounts for managing their income and property-related transactions in India.