As an NRI life insurance customer, you are eligible for tax benefits on the premiums paid and money received from your life insurance policies.
Ø You can avail tax benefits under Section 80C on your Indian income up to `1.5 lakh paid towards Life Insurance.
Ø You can also enjoy additional tax benefits by investing in a life insurance policy under a Hindu Undivided Family (HUF) account as per Section 80C.
Ø You can also avail tax benefits on the earnings and maturity benefits of your life insurance policy under Section 10(10D).
Interest earned on NRO deposit is taxable as per the prevailing rates. However TDS rates are 30.9% for interest earned in NRO FD/NRO account
Note: 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.
Who is a Non-Resident Indian (NRI)? A non-resident Indian (NRI) is an Indian citizen or a person of Indian origin who stays abroad for employment, business or vocation outside India, or stays abroad under circumstances indicating an uncertain duration.
Who is a Person of Indian Origin (PIO)? A Person of Indian Origin means a citizen of any country (other than Bangladesh or Pakistan), if the person: (a) at any time held an Indian passport; or (b) or the persons parents or grandparents were citizens of India; or (c) is a spouse of an Indian citizen, or of a person referred to in (a) or (b) above.
Other terms with vaguely the same meaning are overseas Indian and expatriate Indian. In common usage, this often includes Indian-born individuals (and also people of other nations with Indian ancestry) who have taken the citizenship of other countries.
According to Ministry of Overseas Indian Affairs, India has the second largest diaspora in the world after Overseas Chinese . The overseas Indian community estimated at over 25 million is spread across every major region in the world.
Who is a Foreign Institutional Investor (FII)? An FII is an institution established or incorporated outside India which proposes to invest in Indian securities and is registered with SEBI.
Who is an Overseas Corporate Body (OCB) ? An OCB includes overseas companies, partnership firms, societies and other corporate bodies owned predominantly by non-resident persons of Indian nationality or origin outside India.
Can an NRI maintain a bank account in India? Yes. NRIs can maintain accounts in rupees as well as in foreign currency.
What types of rupee accounts may NRIs maintain? There are 4 types: 1. Non-resident (External) Rupee Accounts (NRE) 2. Non-Resident (Special) Rupee (NRSR) Account 3. Ordinary Non-resident Rupee Accounts (NRO) 4. Non-resident (Non-repatriable) Rupee deposit accounts (NRNR)
What are NRE, NRO and FCNR accounts? Non-Resident (External) Rupee (NRE). This is a Rupee account from which funds are freely repatriable. It can be opened with either funds remitted from abroad or local funds which can be remitted abroad.
Non-Resident Ordinary Rupee (NRO). This is a Rupee account and can be opened with funds either remitted from abroad or generated in India. These funds are non-repatriable. However, under certain circumstances, these are allowed to be repatriated.
Fully Convertible Non-Resident Rupee (FCNR). This account is similar to the NRE account except that the funds are held in foreign currencies and can be maintained in Pound Sterling,U.S. Dollar, Euro and Japanese Yen. FCNR accounts can be maintained only in the form of term deposits, i.e. a deposit kept for fixed periods ranging from 6 months to 3 years.
How do NRE, NRO and NRSR accounts differ? Balances held in NRE accounts can be repatriated abroad freely, whereas funds in NRSR and NRO account cannot be normally remitted abroad but have to be used only for local payments in rupees. Consequently, funds remitted from abroad or local funds which can otherwise be remitted abroad to the accountholder can only be credited to NRE accounts