Non-Repatriable Demat Account for NRIs: Meaning, Features & More

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For Non-Resident Indians (NRIs), investing in the Indian stock market can be both an emotional and financial decision. However, before investing, it is important to understand the types of Demat accounts available and how funds can be used or transferred. One such option is the non-repatriable Demat account, which is designed for investments made using income earned in India.

This blog explains the non-repatriable Demat account meaning, its key features, benefits, and the step-by-step process to open one, helping NRIs make informed investment decisions in the Indian market.

What Is a Non-Repatriable Demat Account?

A non-repatriable Demat account is a Demat account opened by NRIs to invest in Indian financial securities using funds held in a Non-Resident Ordinary (NRO) bank account.

NRI non-repatriable simply means:

Investments are made using India-sourced income (rent, dividends, pension, inheritance, etc.)
Funds are not freely repatriable by default, unlike NRE-linked investments.

However, non-repatriable does not mean non-withdrawable. The rules now allow conditional repatriation with proper tax compliance.

This Demat account type - non-repatriable is governed by RBI, FEMA, and SEBI regulations and is separate from repatriable (NRE) Demat accounts.

Key Features of a Non-Repatriable Demat Account

Below are some of the key features of a non-repatriable Demat account:

1. Linked to an NRO Bank Account: All investments and settlements are routed through a Non-Resident Ordinary (NRO) account, making it suitable for India-sourced income such as rent, dividends, pension, or inheritance.

2. Conditional Repatriation of Funds: Although classified as non-repatriable, funds are not permanently locked in India. NRIs can repatriate up to USD 1 million per financial year from their NRO account after paying applicable taxes and submitting Forms 15CA and 15CB.

3. Wide Range of Investment Options: NRIs can invest in:-

Listed equity shares on NSE and BSE
Equity and debt mutual funds
ETFs, including index and gold ETFs
Bonds, T-Bills, State Development Loans (SDLs), and corporate NCDs
Government Securities through the Fully Accessible Route (FAR) with no investment cap

4. Regulated by RBI, FEMA, and SEBI: The account operates under Indian regulatory frameworks, ensuring transparency, compliance, and investor protection.

5. Simplified PIS Requirements: In many cases, NRIs can invest through the Non-PIS route for NRO accounts, reducing paperwork and ongoing reporting requirements (subject to broker policies).

Note: With an NRO Non-PIS account, NRIs can now pledge their existing shares or mutual funds to get "margins" for trading in the F&O segment. This wasn't easily possible for NRIs a few years ago.

6. Updated Trading Flexibility:

Delivery-based investing is fully permitted.
While Equity Intraday (buying and selling stocks on the same day) is generally restricted for NRIs to prevent speculation, the NRO Non-PIS route in 2026 offers much higher flexibility for F&O Intraday and BTST compared to the NRE route.
Futures & Options (F&O) trading is permitted via the NRO route, with SEBI having relaxed earlier CP Code requirements for many NRIs.

7. Taxation in India: All income, capital gains, interest, and dividends are taxable in India as per the prevailing tax laws. TDS is usually applicable at the source.

Note: "NRIs can benefit from the Double Taxation Avoidance Agreement (DTAA) between India and their country of residence to avoid paying tax twice on the same income."

8. Nomination Facility Available: Investors can (and should) add a nominee to avoid legal complications in case of transmission of securities. Note that as of late 2025, nomination (or an explicit opt-out) is mandatory; failing to do so will result in the account being frozen for debits.

How to Open a Non-Repatriable Demat Account?

Here’s a step-by-step guide on how to open a non-repatriable Demat account:

Step 1: Choose a SEBI-Registered Broker: Select a broker or bank offering NRI Demat services.

Step 2: Open or Link an NRO Bank Account: All investments and settlements flow through this account.

Step 3: Document Submission (Important Checklist)

Passport and visa/residency proof
PAN card
OCI/PIO Card
Indian and overseas address proof
NRO Cheque
Photographs
FEMA declaration
FATCA/CRS Declaration [Mandatory for declaring your tax residency (crucial for US/Canada-based NRIs)]

Note: If you plan to trade in Futures & Options through your NRO account, you must provide Income Proof (last 6 months' bank statement, latest salary slip, or ITR acknowledgement).

Step 4: In-Person Verification (IPV): It can be done via video, embassy, or overseas branch.

Update: Most top-tier brokers now offer Video-IPV (VIPV). NRIs no longer need to physically visit an embassy or a branch.

Step 5: Add a Nominee: Without a nominee, transmission of shares to heirs can become legally complex for NRIs. Important note: SEBI's new framework allows you to add up to 10 nominees (increased from 3).

Benefits of a Non-Repatriable Demat Account

A non-repatriable Demat account offers several practical advantages for NRIs who want to invest in India using locally earned income:

Ideal Use of India-Sourced Income: This account is perfectly suited for investing income earned in India, such as rent, dividends, pension, or inheritance, without the need to convert funds into foreign currency.
Access to a Wide Range of Indian Investments: NRIs can invest in equities, mutual funds, ETFs, bonds, and government securities. The introduction of the Fully Accessible Route (FAR) further allows unlimited investment in select G-Secs, offering sovereign safety and stable returns.
Repatriation Is Possible: Despite the name, funds are not permanently locked in India. NRIs can repatriate up to USD 1 million per financial year from their NRO account after paying applicable taxes and submitting Forms 15CA and 15CB.
Long-Term Wealth Creation in India: This account enables NRIs to participate in India’s economic growth while keeping investments within the Indian financial system, making it suitable for long-term financial planning.
Portfolio Diversification Without Immediate Forex Exposure: Investing via a non-repatriable Demat account helps diversify assets geographically while avoiding frequent currency conversion.
Nomination Facility for Easier Transmission: Adding a nominee simplifies the transfer of securities to legal heirs and helps avoid complex legal procedures, especially important for NRIs.
Inheritance: If an NRI inherits shares from an Indian resident parent, those shares can be easily moved into an NRO Demat account. This is a much smoother process than trying to move inherited assets into a repatriable (NRE) account.

Conclusion

With regulatory simplification, FAR access, relaxed PIS norms, and easier F&O participation, the non-repatriable Demat account has evolved into a powerful investment route for NRIs.

Understanding the true non-repatriable Demat account meaning, especially the $1 million repatriation rule, removes fear and allows smarter decision-making. If you earn income in India and want structured, compliant exposure to Indian markets, this Demat account type is no longer a compromise; it’s a strategic choice.

Also, if you’re an NRI and looking to open a Demat account, consider opting for Choice. We offer free account opening services along with zero AMC for the first year.

Disclaimer: This content is for informational purposes only and does not constitute financial, tax, or investment advice. Regulations are subject to change. Always consult a qualified advisor.