Nationality or Citizen of india?

Dear Concern,
1)Plz explain me whats the difference between Nationality & Citizenship in India?
2)My parents were born in nepal, but i was born in india DOB - 26.06.1983. What should my status be, Nationality of india or Citizen of india?
3)As i am facing problem to apply for indian passport, as they are asking for my parents nationality,Is it necessary to furnish parents docs if i am elligible?
4)Plz guide me with proper indian LAWS & ACTS to prove.

Plz guide me in this matter. Regards...Bhim


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What passports (if any) did your parents hold?

Citizenship Act 1955.

As per http://indiancitizenshiponline.nic.in/acquisition1.htm

this is old version of IC Act,. 1955 now it has been ammended & section 3 also.
I shall explain exactly what happend to me while applying for iNdian Passport.
Now i shall brief u in details how it went for my PP process.

I Applied for my new PP,then PP sends to Police verification,there also i sumitted all docs as required by them.
Then CID raised query about my parents nationality,i disclosed to them(they are Nepali borned & dont have any Birth Cert)& with my dads retirement certificate(36yrs worked for reputed company in goa),along with copy of Indian Citizenship Act,1955 highliting Section3-By Birth.
CID forwarded all docs to PP office,& then PP office started with same queries & we exchanged @3-4 letters, crossfired each others had a arguement with PRO.
On same day PRO showed me report of CID where they had mentioned that "Doubtfull about applicants nationality".
Then PRO informed me, this is incomplete report from CID & we cant process ahead with this reports,so please get new reports from police/CID.

By the time passsed, new system was introduced ie. PSK in march'12, & my file was closed.

Now i have applied again, & PP office informed me that they will go thru earlier files/docs & will be processed.

Now i am very sure this nightmare will start again & i want to be ready.
So, tell me what should be my next strong move?

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The highlights of Section 3 are current and from the indiancitizenshiponline.nic.in

If you know any MLA/MP, or a local Judge have them write a letter attesting to the fact you were born in India.

Thanks for your advice. One more thing i would like to ask, a straight away question is.
Should i apply for citizenship if my case which falls under section 3 (By birth), as it is for section 5 & sec 6?