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The process is very simple, but before doing a hard reset, make sure that you've backed up everything. Files can be backed up to a laptop or desktop OR can be saved to an external drive. Contacts, Calender events and WhatsApp chats can be backed up to your Google Account.
Now, on to resetting process.
i) Within the OS
1. Open Settings
2. Navigate to About Phone
3. Navigate to Backup and Reset
4. Scroll to the bottom and tap on Erase all data (factory reset).
5. Tap on Delete all data.
6. Provide security pattern and confirm
ii) Alternate Method (Recovery Mode)
This method is handy when you forget your PIN/Pattern or can't get into the operating system
1. Turn of your Phone Completely
2. Press and hold Volume UP and POWER to boot into Recovery Menu
3. Select 'Wipe Data'
4. Now select 'Wipe All Data'
5. Click Confirm to start the reset process
6. After that's done, go to Main Menu and select Reboot
7. Finally select Reboot system now to exit recovery mode.
NOTE: Process will be same on almost all Xiaomi Phones
Hope this helps,