Income Tax for NRI: Deductions and Exemptions for NRIs

Deductions and Exemptions for NRIs

Like residents, NRIs are also entitled to claim various deductions and exemptions on their total income and they are as follows –

Like residents, NRIs are also entitled to claim various deductions and exemptions on their total income and they are as follows –‘

Deductions under Section 80C for NRIs

Other deductions allowed to NRI’s under section 80C are as follows –

Other Deductions under Section 80C for NRIs

Other deductions allowed to NRI’s under section 80C are as follows –

Life Insurance Premium Payment

The policy purchased by an NRI must be in his or her name or in the name of the spouse or child’s name (child may be minor/major, dependent/independent or married/unmarried). The premium of the policy must be less than 10% of the sum assured.

Children’s Tuition Fee Payment

NRI’s may take deduction on 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. It also includes payments to play school, pre-nursery and nursery too.

Principal Repayments on Loan for the Purchase of a House Property

Deduction is also allowed for principal loan repayment for purchasing or constructing residential house property in India. It is allowed for stamp duty, registration fees and other expenses done for transferring of property to NRI.

Unit-Linked Insurance plan’s (ULIPS)

ULIP’s are the insurance plans which gives both investment and insurance benefit under one roof to the investor. NRI’s can easily take deductions under Section 80Cby investing in ULIP’s. NRI’s can also contribute towards unit linked insurance plans of LIC mutual fund. For ex - Dhanraksha 1989 and contribution to other UTI units -linked insurance plans.

Investments in ELSS/Mutual Funds

By doing investment in ELSS, you can easily claim deduction under section 80C up to Rs.1.5 Lakhs. Indian taxpayers or NRI taxpayers both are eligible and can enjoy the benefit of Exempt – exempt – exempt (EEE) as it offers great opportunity for the taxpayers to invest and earn from the equity market in a diversified manner.