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Indian citizens staying outside India for more than 182 days in a financial year are treated as NRIs.
Through an NRE account, NRIs are eligible for unlimited repatriation, and an NRO account has a cap of USD 1 million per year.
NRIs can invest in stocks, MFs, bonds, residential/commercial property, and other investment products under FEMA.
Using resident savings accounts even after attaining NRI residential status, stock trading without PIS, property purchase with cash, exceeding the NRO repatriation limit, unreported gains, and so on. The potential penalties for FEMA violations include Enforcement Directorate Penalties, 3X the contravention amount, or Rs 2 lakh (whichever is higher), along with Rs 5000/day for continued violations.
NRIs cannot invest in plantation, agricultural, or farmhouse property except in the case of inheritance. NRIs are not allowed to hold new PPF accounts, chit funds, NBFC deposits, and so on. Investments in listed companies/debt instruments require RBI approval.