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ULIP Taxation for NRIs
Invest in Top Rated1 Funds to Get the returns you Deserve
Invest in Top Rated1 Funds to Get the returns you Deserve
have explored this plan recently!
Investing in Unit Linked Insurance Plans or ULIPs is one of the most strategic ways Non-Resident Indians (NRIs) can ensure the well-being of their loved ones and build their wealth simultaneously. TATA AIA recognizes the distinct financial and tax requirements that NRIs face, and our goal is to help you get clarity and confidence in your investment decisions.
If you are an NRI exploring ULIPs, it is very important to understand how these plans are taxed under Indian laws and how they can benefit you from both a wealth creation and insurance perspective.
What Are ULIPs?
A ULIP combines life insurance with investment in market-linked funds. While providing a life cover, a part of the premium paid is invested in equity or debt funds-or a mix of both-based on your risk profile and financial objectives.
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![Independent ULIP Purchase: Informed Decision, Online Payment]( "Independent ULIP Purchase: Informed Decision, Online Payment")
Wealth Creation
Potential for higher returns through market-linked investments.
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![Hassle-free Online Experience: Quick, Convenient]( "Hassle-free Online Experience: Quick, Convenient")
Life Cover
Ensures financial protection for your family in your absence.
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![Paperless ULIP Purchase: Easy, Environmentally Friendly]( "Paperless ULIP Purchase: Easy, Environmentally Friendly")
Flexibility
Switch between funds to adapt to changing market conditions or personal goals.
Why ULIPs Can Be Attractive for NRIs
Long-Term Growth
ULIPs are designed for longer investment horizons, aligning well with the goals of NRIs who wish to secure their family’s future and build a corpus back home.
Dual Benefit
Combines life insurance and investment into one policy.
Fund Switching
You can switch funds without capital gains tax at the time of switching, based on policy terms.
Taxation of ULIPs for NRIs in India
Though tax laws keep changing, here are general guidelines for an NRI investing in ULIPs in India:
Tax Benefits on Premiums Paid
Section 80C: Premiums paid towards ULIPs may be eligible for a deduction (up to the prescribed limit) under Section 80C of the Income Tax Act, 1961.
Eligibility: The policy must adhere to the guidelines stipulated by the tax authorities (such as sum assured being at least ten times the annual premium for certain tax benefits to apply).
Tax Benefits on Maturity Proceeds
Section 10(10D): The maturity or death benefit from ULIPs may be tax-exempt under Section 10(10D), provided certain conditions (like the premium-to-sum-assured ratio) are met.
Critical Compliance: To claim full tax exemption, your ULIP should comply with the premium-to-sum-assured ratio set by tax regulations.
Withholding Tax (TDS)
TDS or Tax Deducted at Source can be applied in some cases of payouts to NRIs. The rate can be different, depending on the kind of income and prevailing tax laws.
You can claim a refund or adjust your overall tax liability when filing your tax return, if TDS is deducted in India.
Double Taxation Avoidance Agreements (DTAA)
NRIs may benefit from DTAAs that India has with various countries. These agreements aim to prevent paying tax on the same income twice (in India and your resident country).
It’s advisable to consult a tax professional to understand the benefits and procedures for claiming tax relief under DTAA.
Points to Consider
Compliance with FEMA and RBI Regulations
As an NRI, ensure that any policy purchase or premium payment complies with Foreign Exchange Management Act (FEMA) and Reserve Bank of India (RBI) guidelines.
Policy Tenure
Choose a long-term policy to make the most of ULIPs’ potential for compounding returns and to align with your broader financial objectives.
Exit Loads and Charges
Understand the charges involved in a ULIP—premium allocation, policy administration, fund management, etc.—to gauge the net returns.
Professional Advice
Tax laws differ between countries and are subject to periodic changes. It’s wise to seek guidance from a financial or tax advisor familiar with NRI taxation.
Why Choose TATA AIA for ULIPs as an NRI?
Trusted Heritage: TATA AIA brings together the credibility of the TATA brand and our commitment to delivering customer-centric solutions.
Expert Fund Management: Our experienced fund managers strive to optimise returns while balancing risk, helping you achieve your financial goals.
Comprehensive Coverage: We offer ULIPs that provide robust life cover, ensuring your family’s financial security if the unexpected happens.
Flexible Investment Options: Choose from a variety of fund options—equity, debt, or balanced—to suit your risk appetite.
- Seamless Support: Our dedicated NRI support team can guide you through the policy issuance process, premium payments, and claim procedures, wherever you reside.
Conclusion
ULIP investments can be a strategic cornerstone in your financial plan, offering both insurance protection and market-linked returns. For NRIs, understanding the tax implications under Indian law is vital to maximize your savings and protect your wealth.
At TATA AIA, we make it less complicated and simplify the process such that you and your family make the right decision with the necessary information and help. Begin your ULIP today and ensure financial security for yourselves back home.
THE LINKED INSURANCE PRODUCT DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICY HOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR.
Past performance is not indicative of future performance.
All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.
Please make your own independent decision after consulting your financial or other professional advisor.
Param Raksha Life Pro+ is designed for combination of benefits of following individual and separate products named (1) Tata AIA Smart Sampoorna Raksha Supreme Unit Linked, Non-Participating Individual Life Insurance Plan (UIN: 110L179V01) and (2) Tata AIA Vitality Protect Advance - A Non-Linked, Non- Participating Individual Health Product (UIN: 110N178V01).1 All funds open for new business which have completed 5 years since inception are rated 4 star or 5 star by Morningstar as of August 2024
2©2024 Morningstar. All rights reserved. The Morningstar name is a registered trademark of Morningstar, Inc. in India and other jurisdictions. The information contained here: (1) includes the proprietary information of Morningstar, Inc. and its affiliates, including, without limitation, Morningstar India Private Limited (“Morningstar”); (2) may not be copied, redistributed or used, by any means, in whole or in part, without the prior, written consent of Morningstar; (3) is not warranted to be complete, accurate or timely; and (4) may be drawn from data published on various dates and procured from various sources and (5) shall not be construed as an offer to buy or sell any security or other investment vehicle. Neither Morningstar, Inc. nor any of its affiliates (including, without limitation, Morningstar) nor any of their officers, directors, employees, associates or agents shall be responsible or liable for any trading decisions, damages or other losses resulting directly or indirectly from the information.
10As on 03rd April 2024, the company has a total Assets Under Management (AUM) of Rs.100,099.11 Crores
11Individual Death Claim Settlement Ratio is 99.13% for FY 2023-24 as per the latest annual audited figures.
1277,26,727 families protected till December ’23.
*5-year computed NAV for Multi Cap Fund as of December 2024. Other funds are also available. Benchmark of this fund is S&P BSE 200.
Insurance cover is available under the product.
The products are underwritten by Tata AIA Life Insurance Company Ltd.
The plans are not a guaranteed issuance plan and it will be subject to Company’s underwriting and acceptance.
For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
Every effort is made to ensure that all information contained in this document is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
L&C/Advt/2025/Feb/0502
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