What is NRO PIS account?

An NRO PIS (Portfolio Investment Scheme) account is a special type of bank account for Non-Resident Indians (NRIs) that allows them to invest in the Indian stock market. Under the Portfolio Investment Scheme of the Reserve Bank of India (RBI), NRIs can buy and sell shares and convertible debentures of Indian companies on recognized stock exchanges in India.

Key Features of NRO PIS Account

• Enables NRIs to invest in Indian stock exchanges (both primary and secondary markets).
• Funds from the sale of shares can be repatriated abroad after paying applicable taxes. The overall limit for repatriation from an NRO account is USD 1 million per financial year.
• All transactions under the PIS need to be reported to the RBI by the designated bank. This ensures regulatory compliance.
• Earnings from investments are subject to Indian taxes. TDS (Tax Deducted at Source) is applicable on capital gains.
• A separate NRO PIS account is required for routing the investments. This account helps in clear tracking and reporting of investments and earnings.

Process of Opening an NRO PIS Account

• Select a bank authorized by the RBI to offer PIS services.
• Fill in the application form provided by the bank for opening an NRO PIS account.
• Submit necessary KYC documents such as passport, visa, proof of address, and PAN card.
• The bank will obtain the PIS permission from the RBI on behalf of the NRI.
• Link the NRO PIS account with a trading and Demat account for executing trades.

Benefits of NRO PIS Account

• Investments are regulated and compliant with the guidelines set by RBI and SEBI (Securities and Exchange Board of India).
• Provides a convenient way for NRIs to invest in Indian equities and convertible debentures.
• Ensures proper tracking and reporting of investments and earnings, simplifying compliance with tax regulations.
• Allows for repatriation of investment proceeds after tax deductions.

Note: The requirement of PIS through NRO route is now relaxed by RBI and is not mandatory for trading Indian equity stocks. NRI can trade using their normal NRO accounts provided their broker offers the said facility.