When exactly in the FY can returning NRIs invest in PPF?

Question

It is said that an NRI cannot open a PPF account. But consider the case of an NRI individual who has recently returned back to India and has no plan for going abroad again. When exactly can this person open a PPF account in India ?

Example: If the NRI returned to India in Nov 2022 and lets say he/she is considered a NRI for FY 2022-23. So, I suppose they should not open a PPF account until the end of that FY 2022-23 (ie until March 31st 2023).

But then for the next FY 2023-24, the person plans to stay in India throughout and so would be filing the FY 2023-24 taxes as a RESIDENT INDIAN. So, can this person open a PPF account on the first day of the FY 2023-24 in which they will be filing as RESIDENT INDIAN, that is on April 1st 2023 ?

Or should they wait until after 182 days in the FY 2023-24 (ie after Oct 1st 2023) before opening the PPF account ?

Answer 1

As per the Public Provident Fund (PPF) scheme, NRIs are not eligible to open a new PPF account in India. However, if an NRI returns to India and becomes a resident again, they are allowed to continue their existing PPF account until maturity.

In the scenario you have described, the individual would be considered an NRI for the FY 2022-23 and would not be eligible to open a new PPF account during that time. However, if they plan to stay in India throughout the FY 2023-24 and will be filing taxes as a Resident Indian, they would be eligible to open a new PPF account on the first day of that financial year, which is April 1st, 2023.

There is no requirement to wait until after 182 days in the FY 2023-24 before opening the PPF account. Once the individual has become a Resident Indian for tax purposes, they can open a PPF account as per the guidelines for Resident Indians.

It is important to note that the individual must satisfy the residency criteria for tax purposes to be considered a Resident Indian. This is determined based on the number of days spent in India during the relevant financial year and the preceding years. It is recommended to consult a tax expert or a qualified financial advisor for personalized guidance on eligibility and rules for opening a PPF account in India.

The source for the above info is various different articles across internet searches.