Deductions Allowed To NRIs

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• Life insurance premium payment: This deduction can be claimed where the policy has been purchased in the NRI's name or in the name of their spouse or any child's name (the child may be dependent/independent, minor/major, or married/unmarried). To claim deduction under section 80C, the premium must be less than 10 per cent of sum assured.

• Tution fee payment: You can claim tuition fees paid to any school, college, university or other educational institution situated within India for the purpose of full time education of their children (maximum 2). This includes payments for play school, pre-nursery and nursery.

• Principal repayments on loan for purchase of house property: You as an NRI can claim deduction 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: Investment in ULIPS is also allowed as a deduction under Section 80C. This 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.

 

• Deduction from house property income for NRIs: You can claim a deduction of maximum Rs 2,00,000 for interest paid on a home loan for a house property which is lying vacant. For a property which is rented out, the entire interest out go is allowed as a deduction. While calculating rental income of the house property, deduction towards property tax paid as well as 30 per cent standard deduction is allowed to be claimed.

• Deduction under Section 80D: You can also claim a deduction for premium for health insurance of themselves and family or parents in India. This deduction is available up to Rs. 15,000 for insurance of self, spouse and dependent children and is Rs.20,000, where an NRI or spouse is a senior citizen. You 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. 15,000 if the parents are not senior citizens. Therefore, as an NRI, you will be able to claim a maximum deduction of Rs. 40,000 under this section for FY 2014-15. Since 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: Section 80E allows NRIs to 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. 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. No deduction is allowed on the principal repayment of the loan

• Deduction under Section 80G: If all eligible donations have been made as per section 80G of the income tax act, deduction is allowed to NRIs.

• Deduction under Section 80TTA: You  are  allowed to claim a 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.

 

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