I remember the first time I heard about a PIO Card, I was travelling to India and was waiting on my visa. My very blond hair and blue-eyed friend told me I should get a PIO Card. After some research and conversations with my husband, I too became a PIO Card holder.
InvestmentYogi gives an overview of the advantages and disadvantages of PIO/OCI status and the new Government proposed merger of the two.
NRI, PIO and OCI
It is important to know what each abbreviation stands for. An NRI (Non-Resident Indian) is an Indian citizen who is ordinarily residing outside India and holds an Indian Passport. As to where a PIO (Person of Indian Origin) /OCI (Overseas Citizen of India) card holders are people whose ancestors were of Indian Nationality and who is presently holding another countries’ citizenship/nationality (i.e. he/she is holding foreign passport). In respect of facilities available in economic, financial and educational field, PIO/OCI is considered the equivalent of an NRI.
Although PIO and OCI cards have the same description and are similar in nature, they do each have distinct differences. Let’s take a closer look:
PIO vs. OCI
A PIO (Person of Indian Origin) card allows for visa-free travel to and from India. However, a PIO card is only valid for 15 years. Also, if your stay in India is going to exceed 180 days on any single visit you will need to register within 30 days of the expiry of 180 days with the concerned Foreigners Regional Registration Officer/Foreigners Registration Officer or local Police Authorities.
Unlike a PIO, an OCI card has lifelong visa-free travel and does not require the holder to register with any office regardless of the length of their stay.
Eligibility for PIO/OCI
A person is eligible for a PIO/OCI Card if they at any time held an Indian Passport or either of his/her parents, grandparents or great grandparents was born in and are/were permanent residents’ in India as defined in the Government of India Act, 1935 and other territories that became part of India thereafter provided neither was at any time a citizen of Bangladesh, Pakistan, Sri Lanka or other countries which may be specified by the Central Government from time to time.
The difference between OCI and PIO eligibility is:
The PIO scheme is broad-based and includes up to four generations and also the foreign spouse of a citizen of India or a PIO/OCI card holder. OCI states that the spouse of the eligible person can apply for OCI only if they are eligible in their own capacity. Foreign Nationals, who are not eligible for an OCI, but married to someone who is eligible for an OCI, still cannot be granted an OCI.
Benefits and Disadvantages*
The chart below gives a few of the advantages and disadvantages in comparison of PIO and OCI cards.
| Benefits: | PIO | OCI |
| Visa Free Travel | Valid for 15 years | Lifelong Validity |
| No separate Student or Employee Visa required for College admissions or Employment. | Yes | Yes |
| Reporting to Police Authorities | Yes | No |
| You can inherit agriculture or plantation land | Yes | Yes |
| Acquisitions, holding, transfer and disposal of immovable properties in India except in matters relating to the acquisition of agricultural/plantation properties | Yes | Yes |
| Facilities available to children of NRIs for getting admission to educational institutions in India including medical colleges, engineering colleges, Institute of Technology, Institute of Management, etc. under the general categories | Yes | Yes |
| Facilities available under the various housing scheme of LIC, State Government and other Government Agencies. | Yes | Yes |
| Special counters at the immigration check posts for speedy clearance. (NOTE – Due to the number of PIO/OCI card holders it is sometimes easier to go through a regular immigrations checkout.) | Yes | Yes |
| Disadvantages: | PIO | OCI |
| Government Employment | No | No |
| Can hold Constitutional posts such as a President, VP, Judge of Supreme/High Court, etc. | No | No |
| Voting rights | No | No |
| Can acquire agriculture or plantation land (NOTE – You may inherit such land.) | No | No |
*(sourced by www.immihelp.com)
PIO/OCI Finances in India
As a PIO/OCI card holder you can hold a rupee bank account and lend in rupees to Indian residents. As far as investments go, you need to be careful. Holding mutual funds and ETFs can be a cause of headache due to US tax implications for holding non USA-Based mutual funds and ETFs. These are considered to be “Passive Foreign Investments” and involve special rules. All NRI/PIO/OCIs need to submit an FBAR if they are holding $10,000 or more, (this includes all accounts summed together), if they have accounts outside the USA.
PIO/OCI Taxation in India
PIO/OCI card holders who are not residents of India are liable to pay taxes in India only for income earned in India and do not have to declare or pay taxes for income earned abroad. You can read, How do I determine my Residential Status?, to determine your residential status.
In Conclusion
With all that said, in January, 2011, the PM of India, Manmohan Singh, announced that the government will be merging the PIO and OCI cards. What benefits or draw-backs that holds is still unclear. Rumour has it that the program/process will be to convert PIO holders to OCI status and abolish PIO all together. PM Singh stated that under this new act, NRIs will have voting rights. But again, it is still unclear and no official breakdown has been reported. One thing I will say, if you have wanted to get a PIO or OCI card, now is the time to do it.
Written for InvestmentYogi by Lisa Chanamolu
