Tax Benefits for NRIs
Enjoy tax benefits on your life insurance policy in India
As an NRI life insurance customer, you are eligible for tax benefits on the premiums paid and money received from your life insurance policies.
Get tax benefits on the premiums paid:
- You can avail tax benefits under Section 80C on your Indian income up to `1.5 lakh paid towards Life Insurance.
- You can also save tax by investing in a life insurance policy in the name of members under Hindu Undivided Family (HUF) as per Section 80C of the Income Tax Act, 1961.
Other tax benefits*:
- You can also avail tax benefits on the earnings and maturity benefits of your life insurance policy under Section 10(10D).
- As any other Indian citizen, you also enjoy basic Income tax exemption on your Indian income. Below are the exemption limits based on your age:
- `2,50,000 (if you are an individual below 60 years of age)
- `3,00,000 (if you are a senior citizen aged 60 years but less than 80 years)
- `5,00,000 (if you are a super senior citizen of 80 years or above)
- `2,50,000 (if you are an individual below 60 years of age)
- You can move your money from equity to debt funds, or vice versa at no additional charges
*Tax benefits are subject to conditions of Section 80C, 10(10D) & other provisions of the Income Tax Act, 1961, and are subject to amendments made thereto from time to time.
Tax Center – FATCA/ CRS
Central Board of Direct Taxes (CBDT) has notified rules on due diligence, maintenance of information and reporting of the accounts regarding non-resident Indians who are covered under the Foreign Account Tax Compliance Act (FATCA-US person) or Common Reporting Standard (CRS)( Non-US person) on August 7, 2015.
Who is impacted by FATCA/CRS?
It is applicable to all the policyholders, where any of the following indicia is true:
Citizenship or tax residency outside India
Place of birth outside India
Mailing or residence address (including P.O.Box) outside India
Telephone number (residence or mobile) outside India
Standing instruction of transfer funds to an account domiciled outside India
Power of attorney or signatory authority granted to a person with address outside India
A "hold mail" instruction or "in-care-of" address in a jurisdiction outside India if the reporting financial institution does not have any other address on file for the account holder
What are the details required for submitting FATCA/CRS?
Following additional details will be mandatorily required at the time of account opening and at the time of renewals for pre-existing accounts as defined under FATCA/CRS, if not provided earlier. Same has been incorporated in the NRI questionnaire.
Country of Birth
Country of residence as per tax law
Tax Identification number (TIN)
Where can you find more detailed information on FATCA and CRS?
Get Answers To Common Tax-Related Queries
Is TDS applicable on insurance payouts to NRIs?
What is the rate of TDS?
TDS rates as per section 195 are tabulated as below:
| Particulars | Tax Rate |
|---|---|
| Taxable value is up to ₹ 50 lakh | 31.20% |
| Taxable value exceeds ₹ 50 lakh, but up to ₹ 1 crore | 34.32% |
| Taxable value is more than ₹ 1 crore | 35.88% |
Is PAN mandatory?
What is DTAA and how it can be useful for getting a TDS exemption?
Double Taxation Avoidance Agreement (DTAA) is signed by the governments of two nations to eliminate double taxation on the same income in both the countries. DTAA prescribes, the country in which the income earned from a foreign country will be taxable.
Let us understand this with these examples:
DTAA between India and USA - As per the treaty, other income earned from India will be taxable in India and not USA; hence TDS will be applicable on Other Income as per tax laws in India.
DTAA between India and UAE - As per treaty, Other Income earned from India will be taxable in UAE only; hence TDS provisions of India will not attract, however to avail this benefit the policyholder needs to submit valid TRC and Form 10F.
Payouts under a life insurance / Pension policy (Non-annuity) comes under ‘Other Income’ Article and Annuity is a separate article in DTAA.
Click here to view the list of countries where DTAA is applicable.
What is Form 10F?
Form 10F is prescribed under Income Tax Act, 1961 and is required to be submitted by a Non-Resident Indian with details like Name, Address, Status (Individual, company, firm), PAN, Nationality, Tax identification number / Unique ID number in the country of residence, etc.
To download Form 10F, click here
What is Tax Residency Certificate (TRC)?
Who needs to submit Form 10F and Tax Residency Certificate (TRC)?
Comp/doc/Jan/2018/0780.
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