NRIs (Non-Resident Indians), as suggestive of their names, are Indian citizens who have stayed for less than 182 days in India in the preceding financial year (FY). Such persons stay abroad either on account of their employment, or for carrying out a business/vacation outside India or for such purposes that indicate their intention of staying outside India for an uncertain period. They may or may not visit India at frequent intervals. NRI’s are liable to pay taxes in India on the income earned from/through different sources of income or via their assets in India.
Expatriate employees on the other hand, are foreign citizens (who may or may not be Persons of Indian Origin [PIO]) who come to India on deputation/secondment or otherwise for the purpose of taking up employment in India.
As per the visa rules of India, expatriate employees are to be paid a minimum annual salary of USD 25,000 and are mandatorily required to be enrolled under the social security regulations of India, subject to such regulations being applicable on their Indian employer and also subject to the employee being from a country with whom India has entered into a Social Security Agreement (‘SSA’). The salaries paid to them are invariably chargeable to tax in India subject to the provisions of the tax treaty which is in place between India and with the said individual’s home country/territory.