NRI definition –
A Non Resident Indian (NRI) is a person residing outside India, but is a citizen of India or is a Person of Indian Origin (PIO).
Type of Bank Accounts for NRI's in India –
- Non Resident Ordinary Account (NRO)
- Non Resident External Rupee Account (NRE)
- Foreign Currency Non Resident Account (FCNR)
Tax benefits available to NRI's –
Incomes earned in India and abroad cannot be clubbed for the purpose of tax benefits The Income Tax Act 1961, provides the following benefits for NRI's on insurance policies –
- Section 80C - Premiums paid towards life insurance policies are eligible for deduction up to Rs 1 Lakh from the taxable income.
- Section 80D - Premiums paid towards health insurance policies are eligible for a tax rebate of a maximum of Rs 15000/- (Rs. 20,000/- for senior citizens) from the taxable income.
- Section 10(10D) – All benefits received on your life insurance policies are tax free
- Section 10(10A)(iii) – On insurance proceeds, one third of the value at vesting date would be tax free.
If the claimant is living outside India, then the payments will be made to the NRO account of the claimant.