Life Insurance for NRI

• Non-Resident Indian
(N.R.I.)
• Foreign National of Indian Origin
(F.N.I.O.)

Travel & Residence Questionnaire
For Those who Travel Often

Who is an N.R.I ?
• Holding a Valid Indian Passport
• Citizen of India who is temporarily
residing in some other Country (Min-182 days)residing in some other Country (Min-182 days)
• Not a Green Card Holder
• Should not have applied for Citizenship
of any Country

Who is an F.N.I.O. ?
• Foreign National whose Ancestors have
Indian Originality.
• Some proof of Indian Originality needs to• Some proof of Indian Originality needs to
be submitted
• FNIO are to be treated as NRIs for the
purpose of allowing insurance on their
Visit to India with minor restriction

Who is P.I.O. ?
• A Person of Indian Origin (PIO)
is a person of Indian origin or ancestry
but who is not a citizen of India and isbut who is not a citizen of India and is
the citizen of another country.
A PIO might have been a citizen of India
and subsequently taken the citizenship of
another country, or have ancestors born in
India or other states.

NRIs can be allowed
insurance
• On their visit to India
Formalities completed during their stay in India
No maximum Sum Assured limitNo maximum Sum Assured limit
• Mail order Business
Formalities completed in their present country
Maximum Sum Assured allowed is 1-Crore.

Medical Underwriting
for NRI
• On their visit to India
NMS allowed. No NMG, NMG(P)
Same conditions as applicable to Indian LivesSame conditions as applicable to Indian Lives
• Mail order Business
Non-Medical allowed if Agent visits the Country
In other cases, Medical Reports required as per rules

Income Tax for NRIs
A guide to
tax implications
for NRIs

Section I: Basics
Find out your residential status and whether you are required to file an income tax
return.
Section II: Taxable income of an NRI
Learn about taxable income under various heads and special provision for an NRI.
Section III: Deductions and Exemptions for NRIs
Deductions under Section 80CDeductions under Section 80C
Other allowable deductions
Deductions not allowed to an NRI
Section IV: How are you taxed when you are a...
Resident Individual on a temporary foreign assignment
Resident Individual recently moved abroad
Living in a foreign country
NRI recently moved back to India
Resident with global income
Section V: How to avoid double taxation?

Section I: Basics
How do I determine my residential status?
You are considered an Indian resident for a financial year:
when you are in India for at least 6 months (182 days to be exact) during the
financial year
OROR
you are in India for 2 months (60 days) for the year in the previous year AND have
lived for one whole year (365 days) in the last four years.
If you are an Indian Citizen working abroad or a member of a crew on an Indian
ship only the first condition is available to you - which means you are a resident
when you spend atleast 182 days in India. The same is applicable to a PIO who is
on a visit to India. The second condition is not applicable to these individuals.
A PIO is a person who, or any of his parents, or any of his grandparents were born
in undivided India.
You are an NRI if you do not meet any of these conditions.

Is my income earned abroad taxable?
An NRI's income taxes in India will depend upon his residential status for the year.
If your status is 'resident', your global income is taxable in India. If your status is
'NRI', your income which is earned or accrued in India is taxable in India.
Salary received in India or salary for service provided in India, income fromSalary received in India or salary for service provided in India, income from
a house property situated in India, capital gains on transfer of asset situated in
India, income from Fixed Deposits or interest on savings bank account are all
examples of income earned or accrued in India.
These incomes are taxable for an NRI. Income which is earned outside India is not
taxable in India. Interest earned on a NRE account and FCNR account is tax free.
Interest on NRO account is taxable for an NRI.

Am I required to file my income tax return in India?
NRI or not, any individual whose income exceeds Rs.2,50,000
(for FY ending 31st March 2015 or Rs.2,00,000 for FY ending 31st March 2014)
is required to file an income tax return in India.
NRIs must file their returns when they:
want to claim a refund
have a loss that they want to carry forward

Case Study:
Srishti lives and works in the USA. She checked her Form 26AS online and found
out that a TDS entry of Rs 20,000 is showing.
This TDS had been deducted at 30% on interest earned by her in her NRO
account. Srishti has no other income in India.
Does Srishti have to pay any tax in India and is she required to file an
income tax return?
If capital gains from selling an asset is your only income in a financial year and
TDS has been deducted on that, then you are not required to file your income tax
return for that year.

When is the last date to file income tax return in India?
July 31 is the last date to file income tax return in India for NRIs.
Do NRIs have to pay advance tax?
If your tax liability exceeds Rs.10,000 in a financial year,
you are required to pay advance tax .
Interest under Section 234B and Section 234C is applicable
when you don't pay your advance tax.

Section II: Taxable Income of an NRI
Income from salary
Your salary income is taxable when you receive your salary in India or someone
does on your behalf. Therefore, if you are an NRI and you receive your salary
directly to an Indian account it will be subject to Indian tax laws. This income is
taxed at the slab rate you belong to.
Income from Salary will be considered to arise in India if your services are
rendered in India. So even though you may be an NRI, but if your salary is paid
towards services provided by you in India, it shall be taxed in India.
In case your employer is Government of India and you are the citizen of India,
Income from salary if your service is rendered outside India is also taxed in India.
Note that income of Diplomats, Ambassadors is exempt from tax.

Ajay was working in China
on a project from an Indian company
for a period of 3 years.
Ajay needed the salary in India to take care of the needs of his family
and make payments towards housing loan.
However, since salary received by Ajay in India would have been taxed as per
Indian laws, Ajay decided to receive it in China.

Income from House Property
Income from a property which is situated in India is taxable for an NRI.
The calculation of such income shall be in the same manner as for a resident.
This property may be rented out or lying vacant.
An NRI is allowed to claim standard deduction of 30%, deduct property taxes
and take benefit of a interest deduction if there is a home loan.and take benefit of a interest deduction if there is a home loan.
The NRI is also allowed deduction for principal repayment under section 80C.
Stamp duty and registration charges paid on purchase of a property can also be
claimed under section 80C.
Income from House Property is taxed at slab rates applicable.

Nandini owns a house property in Goa
and has rented it out while she lives in Bangkok.
She has set up the rent payments to be received directly in her
bank account in Bangkok.
Nandini's income from this house which is in India shall be taxable in India.

Rental payments to an NRI
A tenant who pays rent to an NRI owner must remember
to deduct TDS at 30%.
The income can be received to an account in India or
the NRI's account in the country he is currently residing.

Maria pays a monthly rent of Rs.30,000
to her NRI landlord.
She must deduct 30% TDS or Rs.9,000
before transferring the money to the landlord's account.
Maria must also get a Form 15CA prepared and submit it online to
the Income Tax Department.

A person making a remittance (a payment)
to a Non Resident has to submit Form 15CA.
This form is submitted online. In some cases,
a certificate from a Chartered Accountant in Form 15CB is required
before uploading Form 15CA online.
In Form 15CB, a CA certifies details of the payment,
TDS rate and TDS deduction as per section 195 of the Income Tax Act,
if any DTAA (Double Tax Avoidance Agreement) is applicable,
and other details of nature and purpose of the remittance.

Form 15CB is not required when:
remittance does not exceed Rs 50,000 (single transaction)
and Rs 2,50,000 (in total in a financial year).
Only Form 15CA is has to be submitted in this case.
if lower TDS has to be deducted and a certificate is received
under section 197 for it or lower TDS has to be deducted by order of the AO.
Neither is required if the transaction falls under Rule 37BB of the Income Tax
Act, where it lists 28 items.
In all other cases, if there is a remittance outside India,
the person who is making the remittance will take a CA's certificate in
Form 15CB and after receiving the certificate submit Form 15CA to the
government online.

Income from other sources
Interest income from fixed deposits and savings accounts held in
Indian bank accounts is taxable in India.
Interest on NRE and FCNR account is tax free.
Interest on NRO account is fully taxable.
Income from business and profession
Any income earned by an NRI from a business controlled or set up in
India is taxable to the NRI.

Income from capital gains
Any capital gain on transfer of capital asset which is situated in India
shall be taxable in India.
Capital Gains on investments in India in shares, securities shall alsoCapital Gains on investments in India in shares, securities shall also
be taxable in India.
If you sell a house property and have a long-term capital gain,
the buyer shall deduct TDS at 20%.
However, you are allowed to claim capital gains exemption by investing in a
house property as per Section 54 or investing in Capital Gains Bonds as per
Section 54EC.

Special provision related to investment income
When an NRI invests in certain Indian assets,
he is taxed at 20%.he is taxed at 20%.
If the special investment income is the only income the NRI has during the
financial year, and TDS has been deducted on that, then such an NRI is not
required to file an income tax return.

What are the investments that qualify for special treatment?
Income derived from the following Indian assets acquired in foreign currency:
Shares in a public or private Indian company
Debentures issued by a publicly-listed Indian company (not private)Debentures issued by a publicly-listed Indian company (not private)
Deposits with banks and public companies
Any security of the Central Government
Other assets of the Central Government as specified for this purpose
in the official gazette.
No deduction under Section 80 is allowed while calculating investment income.

Special provision related to long-term capital gains
For long-term capital gains made from the sale of transfer of
These foreign assets,
there is no benefit of indexation and no deductions allowed under Section 80.
But you can avail an exemption on the profit under Section 115 F
when the profit is reinvested back into:
Shares in an Indian company
Debentures of an Indian public company
Deposits with banks and Indian public companies
Central Government securities
NSC VI and VII issues

In this case,
capital gains are exempt proportionately
if cost of new asset is less than net consideration.
Remember, if the new asset purchased is transferred or sold back
within 3 years, then the profit exempted will be added to the income in
the year of sale/transfer.
The benefits above may be available to the NRI even when he/she becomes a
resident - until such an asset is converted to money AND upon submission of aresident - until such an asset is converted to money AND upon submission of a
declaration for the application of the special provisions to the Assessing Officer
by the NRI.
The NRI may choose to opt out of these special provisions and in that case the
income (investment income and LTCG) will be charged to tax under the usual
provisions of the Income Tax Act.

Section III: Deductions and Exemptions for NRIs
Deductions under section 80C
Most of the deductions under section 80 are also available to NRIs.
For FY 2014-15, a maximum deduction of up to Rs. 1,50,000 is allowed
under section 80C from gross total income for an individual.

Of the deductions under Section 80C, those allowed to NRIs are:
Life Insurance Premium Payment: The policy must be in the NRI's name or in the
name of their spouse or any child's name (child may be dependent/independent,
minor/major, or married/unmarried). The premium must be less than 10% of sum
assured.
Children's Tuition Fee Payment: Tuition fees paid to any school, college,
university or other educational institution situated within India for the purpose of
full time education of any two children (including payments for play school, pre
nursery and nursery).nursery and nursery).
Principal Repayments on loan for purchase of house property: Deduction is
allowed for repayment of loan taken for buying or constructing residential house
property. Also allowed for stamp duty, registration fees and other expenses for
purpose of transfer of such property to the NRI.
ULIPS or Unit Linked Insurance Plan: ULIPS sold with life insurance cover for
deduction under Section 80C. Includes Contribution to Unit Linked Insurance
Plan of LIC Mutual Fund e.g. Dhanraksha 1989 and contribution to Other Unit
Linked Insurance Plan of UTI.
Investments in ELSS

Other allowable deductions
Deduction from house property income for NRIs
NRIs can claim all the deductions available to a resident from
Income from House Property for a house purchased in India.
Deduction towards property tax paid and interest on home loan deduction is
also allowed.

Deduction under Section 80D
NRIs are allowed to claim deduction for premium paid for health insurance.
This deduction is available up to Rs.20,000 for senior citizens and up to
Rs. 15,000 in other cases for insurance of self, spouse and dependent children.
Additionally, an NRI can also claim a deduction for insurance of parents
(father or mother or both) up to 20,000
if their parents are senior citizen and Rs.15,000if their parents are senior citizen and Rs.15,000
if the parents are not senior citizens.
Therefore, an NRI will be able to claim a maximum deduction of Rs. 40,000
under this section.
Beginning FY 2012-13, within the existing limit a deduction of up to Rs. 5,000 for
preventive health check-ups is also available.

Deduction under Section 80E
Under this section, NRIs can claim a deduction of interest paid on an
education loan.
This loan may have been taken for higher education for the NRI, or NRI's spouse
or children or for a student for whom the NRI is a legal guardian.or children or for a student for whom the NRI is a legal guardian.
There is no limit on the amount which can be claimed as a deduction under this
section.
The deduction is available for a maximum of 8 years or till the interest is paid,
whichever is earlier.
Deduction is not available on the principal repayment of the loan.

Deduction under Section 80G
NRIs are allowed to claim deduction for donations for social causes
under Section 80G.

Deduction under Section 80TTA
Non-resident Indians can claim deduction on income from interest on savings
bank account up to a maximum of Rs. 10,000 like Resident Indians.
This is allowed on deposits in savings account (not time deposits) with a bank,
co-operative society or post office and is available starting FY 2012-13.

Deductions not allowed to NRIs
Some Investments under Section 80C:
Investment in PPF are not allowed.
(NRIs are not allowed to open new PPF accounts, however PPF accounts which
are opened while they are a Resident are allowed to be maintained.)
Investments in NSCs
Post Office 5 Year Deposit Scheme
Senior Citizen Savings Scheme.

Investment under RGESS under section 80CCG
Deduction under section 80CCG or Rajiv Gandhi Equity Savings Scheme
was introduced effective assessment year 2013-14.
The main purpose behind this deduction was to increase retail investorThe main purpose behind this deduction was to increase retail investor
participation in equity markets.
Upon satisfaction of certain conditions the deduction allowed is lower of
50% of amount invested in equity shares or Rs 25,000.
This deduction is not available to NRIs.

Deduction for the differently-abled under section 80DD
Deduction under this section is allowed for maintenance includingDeduction under this section is allowed for maintenance including
medical treatment of a handicapped dependent (a person with a
disability as defined for this section) is not available to NRIs.

Deduction for the differently-abled under section 80DDB
Deduction under this section towards medical treatment for a
dependant who is disabled
(as certified by a prescribed specialist)
is available only to Residents.

Deduction for the differently-abled under section 80U
Deduction for disability where the tax payer himself suffers from
disability as defined in the section is allowed only to Resident Indians.

Exemption on sale of property for an NRI
Long-term capital gains (when property is held for more than 3 years)
is taxed at 20%.
Do note that long-term capital gains earned by NRIs are subject to a TDS of
20%.
NRIs are allowed to claim exemptions under section 54, Section 54EC and
Section 54F on long-term capital gains.Section 54F on long-term capital gains.
Therefore, an NRI can take benefit of the exemptions from capital gains at the
time of filing a return and claim a refund of TDS deducted on Capital Gains.
Exemption under Section 54 is available on long-term capital gains
on sale of a house property.
Exemption under Section 54F is available on sale of any asset
other than a house property.

Exemption is also available under Section 54 EC
when capital gains from sale of the first property is reinvested into
specific bonds.
If you are not very keen to reinvest your profit from sale of your first property into
another one, then you can invest them in bonds for up to Rs.50 lakhs issued by
National Highway Authority of India (NHAI) or Rural Electrification Corporation
(REC).
The homeowner has 6 months' time to invest the profit in these bonds,The homeowner has 6 months' time to invest the profit in these bonds,
although to be able to claim this exemption,
you will have to invest before the tax filing deadline.
The money invested can be redeemed after 3 years; but cannot be sold before
the lapse of 3 years from the date of sale.
The NRI must make these investments and show relevant proof to the buyer to
get no TDS deducted on the capital gains.
The NRI can also claim excess TDS deducted at the time of return filing and
claim a refund.

Section IV: How are you taxed when you are a...
Resident Individual on a temporary foreign assignment

Rahul worked out of Singapore on a temporary assignment of 4 months
and earned in Singaporean Dollars during that time.
He got this income credited to a bank account here in India.He got this income credited to a bank account here in India.
He has returned back home now.
How should he file his income tax return?

Rahul's taxes for this year will depend on his residential status.
Since Rahul has not been outside of India for more than 182 days,
he will be considered a resident.
He will be required to file his income taxes in India this year.
This will also include his salary earned during the foreign assignment
in Singapore.
If the assignment extends to more than 182 days,
Rahul's residential status will change and he will be required to pay taxes only
on the Indian income earned thus far.
Here note that, Rahul's foreign income credited to an Indian bank account is
taxable in India.

Resident Individual recently moved abroad
Prashant moves to US on a new assignment.
He gets his US income credited to an NRE account in India.
He continues with his FD investments and has some money put away in a
savings account in India.
He just received Form-16 from his Indian employer.
Should he file his returns this year in India?
NRI or not,
Every individual must file tax return if their income exceeds Rs. 2,50,000.
But note that NRIs are only taxed for income earned/collected in India.
So, Rahul will pay taxes on income earned while in India, and
income accrued from FDs and savings account.

Prashant's income from India
Income from Indian employer Rs. 3,00,000
Interest income from FDs Rs. 25,000
Bank account savings interest Rs. 4,500
Gross total income Rs. 3,29,500
Deductions
Section 80C - PPF investments Rs 20,000
Section 80TTA exemption Rs.4,500
Taxable income Rs. 3,05,000
Tax slab at 10% Rs. 5,500
Cess at 3% Rs.165
TDS deducted by employer Rs. 4,000
TDS deducted by bank Rs. 4,500
Tax Refund Rs. 2835

Living in a foreign country
It's been 3 years since Arjun moved to the US.
He is paid in US dollars.
He has his money invested in savings account and FDs in India.
He has bought an apartment and gave it on rent for Rs.35,000 per month.He has bought an apartment and gave it on rent for Rs.35,000 per month.
He gifts his parents a car and transfers Rs.10,000 every month to their
account to help with their household expenses during the year.
He also transfers Rs 20,000 in his father's account to meet the cost of
insurance policy he has purchased for his parents. 1

Rental income Rs 4,20,000
Less: Standard 30% deduction
under Section 24
Rs.1,26,000
Income from House Property Rs 2,94,000
Income from FDs and bank
account
Rs 30,000
Gross total income Rs 3,24,000
Deduction under Section 80D Rs.20,000
Taxable income Rs.3,04,000

Arjun's gift to his father and money transfer of Rs.10,000 to his mother
are exempt from tax.
Regarding the insurance expenses on his parents,Regarding the insurance expenses on his parents,
Rahul can claim a deduction under section 80D of Rs 20,000,
since his father is over 65 years of age.
He will be required to file tax return in India as his gross income exceeds
Rs. 2,50,000.

NRI recently moved back to India
Returning NRIs assume RNOR status when:
You have been an NRI in 9 of the 10 financial years preceding the year of
your return
OR
You have lived in India for 2 years or less (729 days or less) in the last 7
financial years
The I-T Department allows RNORs to continue to enjoy exemptions available
to NRIs for a period of 2 years after their return.
Therefore, deposits held in foreign currency,
which are exempt for an NRI, shall be exempt to returning NRIs for 2 years.
After these 2 years, returning NRIs are treated as resident individuals.

Resident with global income
If you are a Resident Indian your global income is taxable in India.
This income may have been earned or received outside –
but it shall be taxed in India.
In case this income is also taxable in another country,
you can take benefit of DTAA (Double Tax Avoidance Agreement).
Shreya returned to India in 2010
after living in London for more than 5 years.
The French Company she worked for has retained her as a consultant
and sends her fees in pounds.
Her salary is credited to a bank account there and Shreya pays tax on it in UK.

Does Shreya have to pay tax on this income or include it in her
income tax return in India?
Shreya is a resident in India.
Taxability of income in India depends upon residential status. A Resident has to
pay tax on their Global Income. The resident must disclose all the income earned
by them from all sources and all countries in their income tax return and pay tax
on it in India. (An NRI pays tax only on income earned or accrued in India).
Therefore, all of Shreya's income, including the fee that she earns in foreign
currency will be taxable in India.
Her income in pounds shall be converted to Indian rupees for the purpose ofHer income in pounds shall be converted to Indian rupees for the purpose of
income tax calculation and added to her total income, which will be taxed at slab
rates prescribed by the tax department.
If Shreya has already paid tax on the foreign income in UK, she can claim the
benefit under Double Tax Avoidance Agreement. Based on the relevant
provisions of the DTAA between the two countries, Shreya will be saved from
getting taxed twice.
If you are a resident and have earned any income from abroad, remember to
disclose it in your Income Tax Return. You can still e-file your income tax return
on ClearTax for FY 2012-13 and 2013-14.

Section V: How can NRIs avoid double taxation?
NRIs can avoid double taxation
(meaning: getting taxed on the same income twice in the country of residence
and India)
by seeking relief from Double Tax Avoidance Agreement between
the two countries.
Under DTAA, there are two methods to claim tax relief - exemption method andUnder DTAA, there are two methods to claim tax relief - exemption method and
tax credit method.
By exemption method, NRIs are taxed in only one country and exempted in
another.
In tax credit method, where the income is taxed in both countries, tax relief can
be claimed in the country of residence.

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