Portfolio Investment Scheme (PIS) for NRIs: Rules, Limits & 2026 Updates
- Share.Market
- 4 min read
- 21 Sep 2026
Highlights:
- Portfolio Investment Scheme (PIS) enables NRIs and OCIs to invest in Indian equities via RBI-regulated accounts with updated 2026 limits.
- Differentiate repatriable (NRE-linked) and non-repatriable (NRO-linked) PIS accounts for fund flexibility.
- Individual investment limit increased to 10% of paid-up capital per company (from 5%) per 2026 RBI updates; aggregate up to 24%.
- Eligibility covers NRIs, PIOs/OCIs under FEMA compliance, with recent expansions.
Introduction
Living abroad does not preclude participation in India’s equity markets. Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and eligible Persons Resident Outside India (PROIs) must use the RBI-mandated Portfolio Investment Scheme (PIS) for stock exchange transactions, ensuring compliance while facilitating portfolio investments.
What is Portfolio Investment Scheme?
Portfolio Investment Scheme (PIS) is an RBI-regulated framework allowing NRIs/OCIs/PROIs to buy and sell listed Indian equity shares, convertible debentures, and preference shares on BSE and NSE through designated bank accounts.
PIS monitors foreign portfolio flows and facilitates compliant repatriation where applicable. It excludes mutual funds (separate NRE/NRO routes) and government securities (Fully Accessible Route).
Eligibility includes NRIs, PIOs/OCIs, and (per 2026 updates) broader individual PROIs residing outside India, excluding citizens of Pakistan and Bangladesh under FEMA.
Types of PIS Accounts
PIS accounts exist in two forms, repatriable and non-repatriable. Your choice determines where sale proceeds go.
Repatriable PIS accounts link to NRE/FCNR accounts; funds from abroad are fully repatriable (principal and gains, post-tax). This suits NRIs with overseas income sources.
Non-repatriable PIS accounts link to NRO accounts; funds from Indian sources have restricted repatriation (subject to a USD 1 million annual limit and taxes for current income).
Both types follow the same investment limits and monitoring. NRIs can maintain both if managing mixed fund sources.
Investment Limits and RBI Rules
As of June 2025/2026 RBI announcements, individual NRI/OCI/PROI holdings are capped at 10% of a company’s paid-up equity capital (doubled from 5%). The aggregate limit for all such investors rose to 24% (from 10%), extendable further with company board/shareholder approval in line with sectoral FDI caps.
Example: For a company with ₹100 crore paid-up capital, an individual can now hold up to ₹10 crore (10%), with total overseas individual holdings up to ₹24 crore (24%).
Designated Authorised Dealer (AD) Category-I banks monitor limits transaction-by-transaction via RBI reporting and maintain watch/caution lists. Only RBI-approved banks can open PIS accounts; transactions are routed exclusively through them and registered brokers.
Detailed Taxation for PIS Investments (2026)
| Aspect | Repatriable (NRE-linked) | Non-Repatriable (NRO-linked) | Notes / Rates (FY 2026-27) |
|---|---|---|---|
| STCG (Holding ≤12 months) | 20% | 20% | TDS @20% on gains |
| LTCG (Holding >12 months) | 12.5% without indexation (above ₹1.25 lakh exemption) | 12.5% without indexation (above ₹1.25 lakh) | DTAA benefits may apply |
| Dividend Income | 20% | 20% | TDS @20% |
| Repatriation | Fully allowed (post-tax) | Restricted (USD 1M/year for eligible amounts) | Form 15CA/CB required |
| Interest on PIS-linked Funds | Tax-free in India (NRE) | Taxable at slab rates (NRO) | DTAA relief possible |
Key tax notes
- No tax on repatriation of principal in repatriable accounts.
- Double Tax Avoidance Agreements (DTAA) with many countries (e.g., USA, UK, UAE) can reduce effective rates.
- Advance Tax and ITR filing are mandatory for NRIs with PIS income.
Moving Forward with PIS
PIS remains the primary regulated channel for NRI equity participation in India’s stock market. With 2026 limit enhancements, NRIs can now take larger positions while maintaining compliance. Choose an account type based on fund source and repatriation needs, and consult authorised banks for personalised limit checks.
FAQs
Yes, the RBI mandates NRIs route all equity purchases through PIS accounts with designated banks to monitor foreign investment compliance and repatriation.
Repatriable PIS accounts allow transferring sale proceeds abroad after taxation, while non-repatriable accounts restrict funds to domestic use only within India.
The individual limit is 10% of paid-up capital per company; the aggregate for all eligible investors is 24%, per updated RBI norms.
No, PIS accounts require RBI-designated authorised dealer banks with regulatory approval for foreign portfolio transactions. Not all banks offer this facility.
NRIs, PIOs, and OCIs residing outside India qualify for PIS accounts. Citizens of Pakistan and Bangladesh remain excluded under FEMA rules.
