Income Tax benefits available under insurance policies
Life Insurance Policies:
Tax benefit on premium paid Income tax benefit/deduction on premium paid is available under section 80C of the Income Tax Act, 1961 ("Act). In case the premium paid during the financial year exceeds 10% of the sum assured, the benefit will be limited up to 10% of the sum assured.
Tax benefit on maturity/surrender value Income tax exemption under section 10(10D) of the Act is available at the time of maturity/surrender, subject to the premium not exceeding 10% of the sum assured in any of the years during the policy term.
Tax benefit on death proceeds Death proceeds are not taxable. However, this is subject to certain conditions under section 10(10D) of the Act.
TDS on proceeds Insurance proceeds, which are taxable under section 10(10D) of the Act, may be subject to TDS as per the prevalent income tax laws applicable to Resident Indians and Non Resident Indians(NRI’s)*.
* Subject to Double Taxation Avoidance Agreement (DTAA) in case of NRI's
Tax benefit on premium paid Income tax benefit/deduction is available on premium paid, under section 80CCC of the Act.
Tax benefit on pension proceeds On vesting, the policy holder can currently commute up to one-third of the policy proceeds which is exempted from tax under Section 10(10A)(iii) of the Act. The non-commuted pension proceeds taken in the form of immediate annuity are taxable in the hands of the recipient.
Tax benefit on death proceeds The lump sum death proceeds are not taxable.
Surrender/annuity proceeds Under pension policy, these are taxable in the hands of the recipient. In case of Non Resident Indians (NRI's), TDS may be applicable on such surrender proceeds as per the prevalent income tax laws, subject to DTAA.
Health Riders/In-built Benefit:
In case of premium paid towards Health Riders (i.e. Critical Illness, etc), deduction under Section 80D is available.
Taxes/cess applicable on insurance premium/ULIP charges
Goods & Service Tax (GST)/ Cess and/or any other statutory levy/ duty/ surcharge, at the rate notified by the Central Government/ State Government / Union Territories of India from time to time, shall be levied on premium / charges (as applicable) as per the provisions of the prevalent tax laws.
In case of Non-Linked Insurance/Traditional Plans:
Rider Premium (if any)
Any other charge as per the product feature
In case of Unit Link Insurance Plans (ULIP):
Policy Administration Charges
Fund Management Charges
Discontinuance / Surrender Charges, if any
Partial Withdrawal Charges, if any
Any other charge as per the product features
Disclaimer: All the above mentioned provisions, as applicable, are as per the prevalent Income Tax laws in India and subject to change from time to time. Please consult your tax advisor for details. Also you may visit http://www.incometaxindia.gov.in for further details.
As an NRI you can grow your wealth and protect your future by investing in our plans
We offer various insurance plans for NRIs that provide protection and opportunity for savings and wealth creation. The information below will help you understand how you can enroll with us.
Non Resident Indians:
A non-resident Indian is a citizen of India temporarily residing in the country of his/her present residence and holding a valid passport issued by the Government of India.
Policies are issued in Indian Rupees only.
NRIs are allowed insurance on their visit to India where all formalities are completed during their stay in India.
NRIs can also obtain insurance cover from their present country of residence under exceptional circumstances where all formalities are completed in their country of residence.
People of Indian Origin (PIO) having foreign nationality and residing in foreign countries (PIO) are not considered as NRIs for the purpose of allowing insurance.
Requirements to apply for Life Insurance:
Duly filled Proposal Form
Proof of age & income
A recent photograph
Initial deposit equivalent to instalment premium under the proposed plan of insurance
Copy of Bank account in India (premium to be paid from a bank account in India/NRE account)
Duly attested passport copy
NRI Questionnaire (refer annexures)
Permanent address in India along with the proof (if different from the mailing address)
Pan card or Form 60 where premium (total annualized premium under all policies) paid is 50,000 & above
FATCA form for NRI as well as PIO/OCI details of TIN number to be quoted where proposer is tax resident of country outside India
Medical tests wherever applicable
Proposal Form needs to be signed in India
Under exceptional cases, Proposal Form signed abroad will be considered if the same is witnessed by:
The employer in case of employed persons
Dean or Principal of educational institutes in the case of students
Banker (Abroad) of the Proposer
Indian Consulate / Indian Embassy official
Notary/Attorney working in the country of residence of NRI
Medical tests have to be done in India except when the Proposal Form has been signed outside India. The list of medical tests to be conducted & format of the medical report (FMR) will be shared with the client by our SBI Life official.