Get Protection + Monthly Income after Retirement

What are the tax benefits on ULIP pension plan for NRIs?

Dec 04, 2018 | 2 years ago | Read Time: 3 minutes | By iKnowledge Team

NRIs have to adhere to different taxation policies for banking and transactions. Since NRIs have to pay higher taxes than a normal Indian citizen, here are taxation policies on ULIP funds which might help you save money.

There are some NRIs who often have retirement plans which involve moving to India, and spending the rest of their lives here. Their extensive plans include buying a property, keeping money in their savings account, investing in the stock market, and many other things. While all of this seems picture perfect, but they fail to realize that even though they have a good amount of money with them in the country they live, to get that money in India, they will have to go through a lot of formalities.

Firstly, when NRIs come to India, to perform banking and transactions, they need to open an NRE or NRO savings or current account. There is a certain procedure which has to be followed to open these accounts, and using these accounts, you can exchange your foreign currency for usage. Similarly, for investments, there are formalities which need to be fulfilled. Many NRI investors, who invest in the Indian stock markets, face a hard time in the beginning and end up losing their capital. To avoid such situations, you need to invest in options that are low at risk, and one such plan is ULIPs.

ULIPs are hybrid insurance policies that offer dual benefits of investment and insurance. The premiums paid in these policies are divided into parts, and are allocated for equity investments, and the rest of the amount is kept for insurance. Some insurance companies invest a major amount of the premium for returns whereas, some allocate a larger share of the premium in insurance for comprehensive cover. ULIP investment plans are also known to offer extra benefits for senior citizens that include tax benefits.

Here are the tax benefits which are applicable on ULIP funds:

  • Section 80D: The government of India has made some exceptions for taxes on payments for insurance. Section 80D of the Indian Income Tax Act, 1961 states that any payment made towards medical expenses and insurance is eligible for deduction. The benefit of this Act can be enjoyed by NRIs as well. Moreover, senior citizens can avail deduction benefits up to INR 60,000.
  • TDS (Tax Deductible at Source): ULIPs payouts are done annually, half-yearly or monthly which can be chosen by the policyholder. These payouts can include amounts that exceed INR 10,000, which is the limit for payouts. Such amounts are prone to TDS deductions which can be claimed later while filing returns.
  • DTAA: Sometimes NRIs end up paying taxes of both the countries which can reduce their overall income. Moreover, the taxes for NRIs are comparatively higher than those for a permanent citizen of India. To avoid paying double taxes, you can apply for a Double Taxation Avoidance Agreement. India has signed the DTAA with more than 80 countries, so before applying, you need to check if the country has a DTAA with India.

To get the best assistance with ULIP funds, you can choose to invest in the ULIP products offered by Aegon Life. The company’s ULIPs product iInvest investment plans can be the ideal solution for your taxation related problems. The plan offers investment and protection with a financial cover for your family. Moreover, it provides you with an option of investing from 6 unit-linked funds. The minimum amount of investment that you can make is Rs 2000. Whereas, if you are interested in returns and the coverage spectrum, you can choose policies like iMaximize, an online ULIP plan which is more inclined towards providing high profits to the policyholder. The plan provides you with flexibility so that you can invest in accordance with your risk appetite. At the same time, this plan also offers the Triple benefit pay-out option that serves your child’s needs even when you are no longer around. To get a better insight about the policies, you can visit their website or contact them via helpline number. Apart from ULIPs, you can also avail tax benefits through health insurance.

II/Oct 2018/4470.


iTerm Plan

Life Insurance Plan with 3 Options to Choose from

  • Life Protect (Life cover till age 100 years)
  • Protect Plus (5% Automatic Increase of life cover)
  • Dual Protect (Protection + Regular Income)
iTerm Plus Plan

Life Insurance Plan with 4 Options to Choose from

  • Life Plan
  • Life Plus Plan
  • Life & Health Plan (10 Critical Illnesses covered)
  • Life & Health Plus Plan (36 Critical Illnesses covered)
iInvest Plan

iInvest Plan with 3 Options to Choose from

  • Increases Your Investment
  • Boost Your Fund Value
  • Withdraw Your Investment
Raising a child: Future financial planning, saving and investments
What, why, and how?
Secure Your Liabilities Now. Calculate your Premium!
Do You Smoke?

Date of Birth

Your Monthly Premium for Aegon Life iTerm Insurance Plan