I am an Indian citizen but currently an NRI (living and working outside India).
I trade equity options (index options mainly) using a normal resident trading account. I have not converted the trading/Demat account to an NRI account, and it is not linked to an NRE/NRO setup.
So far, the broker hasn’t raised any issue and trading works normally.
My questions:
1. Is this allowed under FEMA / RBI rules, or is this technically non-compliant?
2. What are the realistic consequences if I continue like this (account freeze, tax issues, penalties, etc.)?
3. If conversion is required, is Non-PIS NRI account sufficient for options trading?
4. Has anyone here gone through forced conversion or faced issues later?
Looking for experiences or informed guidance from people who’ve dealt with this.