Non-PIS Account for NRIs: Rules, Tax & 2026 Updates

What is a Non-PIS account for NRIs?

If you’re an NRI investing back home, you’ve probably hit the term PIS (Portfolio Investment Scheme) and wondered whether you actually need it. Here’s the short answer: often, you don’t. A Non-PIS account for NRIs is an NRI bank account used for investments in India that fall outside the RBI’s Portfolio Investment Scheme. It’s linked to either an NRE or NRO account, depending on where your money comes from and whether you want to take it back out later.

Knowing when a Non-PIS account is enough and when a PIS account is mandatory helps you invest compliantly, skip unnecessary restrictions, and pick the right banking setup. New to all this? It helps to first understand what NRI status means and how it decides which rules apply to you.

A Non-PIS account is commonly used for:

• Investing in mutual funds
• Buying shares on a non-repatriation basis
• Investing in IPOs (non-PIS route)
• Purchasing bonds, debentures, and government securities

Unlike PIS accounts, Non-PIS accounts are not subject to RBI-mandated investment ceilings for equity markets.

What is the Portfolio Investment Scheme (PIS)?

The Portfolio Investment Scheme (PIS) is an RBI framework that lets NRIs invest in Indian equity shares and convertible debentures on a repatriation or non-repatriation basis through recognised stock exchanges.

Under PIS:

• Each NRI designates one bank branch for all equity trades
• Banks report transactions to the RBI
• Investments are subject to sectoral and individual caps

Single PIS account (effective 2025): NRIs no longer need separate NRE and NRO PIS accounts. One NRE PIS account now handles both repatriable and non-repatriable investments. If you still hold an older NRO PIS account, confirm its current status with your designated bank.

Budget 2026 – higher caps and broader access: India’s Budget 2026 doubled the individual investment limit for Persons Resident Outside India (PROI), including NRIs, in listed Indian companies from 5% to 10%. The aggregate limit rose from 10% to 24%. The government also introduced a direct equity investment pathway for overseas individuals NRIs, OCIs, and foreign nationals under the Portfolio Investment Scheme, removing the need to route investments through registered Foreign Portfolio Investors. The RBI is still operationalising this expanded framework, so verify the current implementation status with your designated bank before acting on the new limits.

(Sources: Union Budget 2026-27, Ministry of Finance; Business Standard, February 1, 2026; Angel One Budget 2026 Analysis)

PIS remains mandatory for secondary-market equity trading on Indian stock exchanges on a repatriable basis.

Non-PIS vs PIS account: key differences

Aspect	Non-PIS account	PIS account
RBI reporting	Not required	Mandatory
Investment caps	Not applicable	Applicable
Equity trading	Limited cases	Mandatory
Mutual funds	Allowed	Allowed
IPO investments	Allowed	Allowed
Account linking	NRE or NRO	NRE or NRO
Compliance complexity	Lower	Higher

When do NRIs need a Non-PIS account?

As an NRI, you’ll typically use a Non-PIS account when:

• Investing in mutual funds
• Buying shares through IPO or FPO routes
• Investing on a non-repatriation basis
• Purchasing government securities or bonds

For these, the RBI doesn’t require the PIS framework, so a Non-PIS account is both sufficient and simpler.

US and Canada-based NRIs – FATCA compliance: If you’re in the US or Canada, you must submit updated FATCA declarations every year. Non-compliant accounts can be frozen. Some instruments mutual funds, bonds, REITs don’t require PIS, but FATCA compliance is still mandatory. Confirm eligibility with your AMC or fund house before investing.

KYC status matters in 2026: In 2026, your KYC status shows as validated, registered, on hold, or rejected and only validated status enables smooth investing across AMCs without extra paperwork. Check your KYC status on a KRA or RTA website before investing, and fix any issues before you choose products.

(Sources: Motilal Oswal NRI Demat Guide 2026; WealthMunshi NRI Compliance Guide 2026)

Repatriation rules for Non-PIS investments

Before you decide which account to link your Non-PIS investments to, it’s worth understanding NRI repatriation rules. They differ a lot depending on whether your account is NRE or NRO.

• NRE-linked Non-PIS account: investments and returns are generally repatriable
• NRO-linked Non-PIS account: repatriation is subject to the USD 1 million annual limit and tax compliance

The USD 1 million ceiling applies to the total of all remittances from your NRO account in a financial year, not per transaction. NRO-based redemptions need you to verify you haven’t crossed the $1 million annual cap, and large transfers may require chartered-accountant certification.

One planning point that’s easy to get wrong: if you move foreign funds into an NRO account instead of an NRE one, you permanently give up full repatriability on that money. So be deliberate about which account you credit foreign remittances to. This matters most when you’re sending money to India through a transfer app; make sure you’re crediting the right account from day one.

Critical planning note: if you transfer foreign funds into an NRO account (instead of NRE), you permanently lose full repatriability for those funds. Always be deliberate about which account you credit foreign remittances to. This matters most when you’re sending money to India through a transfer app; make sure you’re crediting the right account from day one.

(Sources: WealthMunshi NRI Compliance Guide 2026; NRI Investment Planning Guide 2026)

How are Non-PIS investments taxed?

The capital gains tax for NRIs applies the same way whether you invest via the PIS or Non-PIS route; the account type doesn’t change your tax liability.

Equity mutual funds and listed equity shares

Short-term gains are taxed at 20% and long-term gains at 12.5% without indexation. (The 20% short-term rate replaced the earlier 15% with effect from 23 July 2024, so it’s worth a second look if you last checked a while ago.) The ₹1.25 lakh exemption applies specifically to long-term capital gains under Section 112A, which covers listed equity shares and equity-oriented mutual funds.

Type	Holding period	Tax rate	TDS deducted
STCG — Equity / Equity MF	Under 12 months	20%	20%
LTCG — Equity / Equity MF	12 months or more	12.5% on gains above ₹1.25 lakh	12.5%

Key points:

• All rates are exclusive of applicable surcharge and 4% Health & Education Cess
• The basic exemption limit under Section 111A for short-term capital gains is not available to non-residents. TDS must be deducted compulsorily on STCG earned by non-residents
• No indexation benefit is available on equity LTCG

Debt mutual funds (purchased on or after April 1, 2023)

• Gains are taxed at your applicable income tax slab rate, regardless of holding period
• TDS is deducted at 30% on redemption proceeds for NRIs

DTAA benefits

• India has DTAA treaties with over 90 countries. As an NRI, you may be eligible for reduced TDS or exemptions depending on your country of residence
• A valid Tax Residency Certificate (TRC) and Form 10F are required to claim DTAA benefits before you earn income
• NRIs in the UAE, Singapore, Mauritius, Kuwait, and Oman may have favourable treaty provisions; consult a qualified CA for country-specific guidance
• You can apply under Section 197 for a Lower Deduction Certificate if your actual tax liability is lower than the standard TDS rate

These rates currently apply in FY 2025-26. No changes to equity capital gains tax rates were announced in Budget 2026. Always verify current rates with a qualified Chartered Accountant before investing.

(Sources: ClearTax April 2026; Investmates NRI Capital Gains Guide March 2026; Axis Max Life Capital Gains Guide February 2026)

What this means when you send money to India

If you’re an NRI sending money home, converting USD to INR or EUR to INR, the account you receive funds into directly shapes your investment flexibility and repatriation rights.

As of June 2026:

• 1 USD ≈ ₹94.74 INR (mid-market rate, June 23, 2026)
• 1 EUR ≈ ₹108.19 INR (mid-market rate, June 23, 2026)

The rupee has actually strengthened a little against both the dollar and the euro since the spring, and rates move every day. The rate you actually get through a transfer app depends on the provider’s margin and fees on top of that. When you’re sending a larger sum to invest, even a small gap in the USD–INR or EUR–INR rate can meaningfully change how much money you end up putting to work.

Key guidance for NRIs transferring money to invest

• Credit foreign remittances to your NRE account if you want full repatriation of investment proceeds
• Credit India-sourced income to your NRO account, but mind the USD 1 million annual repatriation cap
• Always check the live exchange rate and total fees before you transfer; the rate shown is rarely the rate you receive after deductions

Exchange rates sourced from MTFX and BookMyForex mid-market data, May 2026. Actual transfer rates differ by provider. Always check live rates before sending.

Common mistakes NRIs make in 2026

• Keeping a separate NRO PIS account after the 2025 simplification; it’s no longer necessary
• Missing the Budget 2026 increase in individual investment caps (5% → 10%) and not reassessing their equity strategy
• Crediting foreign remittances to an NRO account instead of NRE permanently losing full repatriability
• Not submitting Form 10F and TRC before earning income, losing DTAA benefits and facing excess TDS
• Failing to update FATCA declarations annually (US/Canada NRIs), risking an account freeze
• Not checking KYC validation status before investing, causing blocked transactions across AMCs

Getting your money into the right account

When you’re moving money to India to invest, two things quietly decide how far it goes: the rate you get, and the account it lands in. Scopex offers real-time rates that beat mid-market, transfers that typically arrive in around five minutes, and upfront pricing with no surprises, so more of what you send reaches India and stays repatriable. It’s worth comparing today’s live rate before your next transfer.

FAQs: Non-PIS accounts for NRIs

What does Non-PIS mean for NRIs?

It refers to investments outside the RBI’s Portfolio Investment Scheme: mutual funds, IPOs, government bonds, and shares purchased on a non-repatriation basis.

Can NRIs buy mutual funds using a Non-PIS account?

Yes, NRIs can buy mutual funds using a Non-PIS account. Mutual fund investments do not require a PIS account, so a Non-PIS account linked to an NRE or NRO account is sufficient. NRIs based in the US and Canada must confirm AMC eligibility under FATCA rules and submit FATCA declarations annually.

Is a PIS account mandatory for IPO investments?

No, a PIS account is not mandatory for IPO investments. NRIs can apply for IPOs through the Non-PIS route using an NRE or NRO account. A PIS account is only required for repatriable secondary-market equity trading on Indian stock exchanges.

Are Non-PIS investments repatriable?

Non-PIS investments are repatriable depending on the linked account. Non-PIS investments linked to an NRE account are fully repatriable. Non-PIS investments linked to an NRO account are repatriable up to the USD 1 million aggregate annual limit, after tax compliance.

Do NRIs still need separate NRE and NRO PIS accounts?

No, NRIs no longer need separate NRE and NRO PIS accounts. Since the 2025 simplification, a single NRE PIS account covers both repatriable and non-repatriable investments. NRIs holding an older NRO PIS account should confirm its current status with their designated bank.

What changed under Budget 2026?

Finance Minister Nirmala Sitharaman announced a doubling of the investment cap for NRIs in Indian listed companies as of February 1, 2026. The individual cap moved from 5% to 10%, the aggregate cap from 10% to 24%, and the PIS route was opened to all Persons Resident Outside India. The RBI is operationalising this; verify timelines with your bank.

How does the USD to INR rate affect my investment value?

When you remit funds from abroad, the exchange rate at the time of transfer decides how many rupees reach your NRE or NRO account. A stronger rupee means fewer INR for the same USD or EUR sent. Timing larger investment-linked transfers around favourable exchange rates can make a meaningful difference.

Final thoughts

A Non-PIS account gives NRIs a simpler, more flexible route for many types of investments in India. Once you know when a PIS account is required and when it isn’t, you can structure your finances more efficiently, reduce compliance headaches, and invest with greater confidence. Choosing the right investment route isn’t just about compliance; it’s about long-term clarity and control.

Sources & disclaimer

This article is for general informational purposes only and does not constitute financial, investment, tax, or legal advice. Nothing here should be construed as a solicitation or offer to buy or sell any financial instrument.

Regulatory rules, tax rates, RBI/SEBI guidelines, and exchange rates referenced are based on publicly available information as of May 2026 and are subject to change. Capital gains tax rates reflect currently applicable provisions in FY 2025-26. Budget 2026 investment-cap revisions are proposals announced on February 1, 2026; verify current implementation status with your designated bank or the RBI. Exchange rates cited are mid-market reference rates and are not the rates you’ll receive on a money transfer — actual rates vary by provider.

Scopex does not guarantee the accuracy, completeness, or timeliness of any information herein. Always consult a qualified Chartered Accountant or financial advisor before making investment decisions. For official guidance, refer to the RBI (rbi.org.in), SEBI (sebi.gov.in), and the Income Tax Department of India.