If you have the status of a Non-Resident in India for taxability purposes then this article is for you. Through this article, we have discussed the various tax deductions available to Non-Resident Individuals (NRIs) while filing the return of Income in India under the Income Tax Act, 1961.
So, without further ado. Let’s start the discussion.
Happy reading!!
Deductions are available to Non-Resident Individuals (NRIs)
- Deduction under Section 80C of the Income Tax Act, 1961
As per section 80C of the Income Tax Act, 1961, an eligible taxpayer can avail the deduction of a maximum amount of Rupees. 1,50,000 while filing the return of Income. For claiming this deduction an eligible taxpayer has to make certain specified investments and incur certain expenses in the previous financial year.
In the case of a Non-Resident Individual assessee following investments and expenses are allowed for claiming deduction under section 80C.
● LIC (Life Insurance Policy) – A Non-Resident Individual is eligible to claim the deduction of the premium amount paid towards the Life Insurance Policy taken for self, spouse, and children.
● Unit Linked Insurance Plans (ULIsP) – The amount invested by a Non-Resident Individual in Unit Linked Insurance Plans (ULIPs) taken for self, spouse, and children are also allowed as a deduction under Section 80C. But there is a lock-in period of 5 years.
● Equity Linked Tax Saving Scheme (ELSS) – The amount invested in Equity Linked Savings Scheme (ELSS) is also eligible as a deduction to Non-Resident Individual assessees under section 80C.
● Tuition fee payment – A Non-Resident Individual can avail the deduction of the amount paid as tuition fees for the full-time education of two children at any school, college, or university situated in India.
● Repayment of home loans – A Non-Resident Individual can also claim a deduction of the principal amount repaid by him on a loan taken for the purchase or construction of a residential house i.e, a home loan from any banks or financial institutions.
● Other Expenses (stamp duty & registration fee) – The amount paid for the stamp duty and registration fee by a Non-Resident Individual in the course of acquiring such residential house property is also allowed to the NRI assessee under section 80C.
Apart from the above, a Non-Resident Individual is not entitled to claim deduction on the amount invested in the Public Provident Fund (not allowed to open as an NRI), National Saving Certificate, Time Deposits, or Fixed Deposits, and Senior Citizen Savings Scheme.
- Deduction under Section 80D of the Income Tax Act, 1961
A Non-Resident Individual assessee is also eligible for availing deduction under section 80D on the following payments:-
● Any premium payment made for the health insurance of self, spouse, parents, and dependent children.
● Any medical expenditure incurred on the health of senior citizens (age 60 or more) for self or any family member or parents.
● Any payment made for the preventive health checkup for self, spouse, dependent children & parents.
The maximum limit of the amount allowed as deduction under section 80D to Non-Resident Individuals is given as below:-
| Particulars | Maximum Limit |
| Medical Insurance Premium (self, spouse & dependent children) + Preventive Health Check-up | Up to Rupees 25,000/- |
| Additional deduction (Medical insurance premium for parents) | Up to Rupees 25,000/- (*If the age of parents less than 60 years)Up to Rupees 50,000/- (*If the age of parents is 60 or more) |
| Medical Expenditure of Senior Citizens (age 60 or more, if not covered under any health insurance plan) | Up to Rupees 50,000/- |
| Preventive Health Checkup | Up to the aggregate of Rupees. 5,000 |
- Deduction under Section 80E of the Income Tax Act, 1961
As per section 80E, a Non-Resident Individual assessee is eligible to take a deduction of interest amount paid for education loan taken for higher studies for self, spouse, children, or for a legal guardian. The deduction is allowed for the following period:-
- A period of consecutive 8 years starting from the year in which NOn-Resident individual assessee starts paying Interest, or
- Till the interest amount is fully paid,
whichever is earlier. Please note that no deduction is allowed on the amount paid towards the principal repayment of the loan.
- Deduction under Section 80G of the Income Tax Act, 1961
Non-Resident Individuals are also allowed to claim a deduction of eligible donations they have made under section 80G of the Income Tax Act.
P.S. Doner assessee shall be entitled to deduction under section 80G only if:-
(i) The donee trust or charitable institutions prepares and submits a statement of donation in Form No. 10BD, and
(ii) Furnish a certificate of donation to the donor assessee in Form 10BE,
The time limit to submit Form 10BD and furnish Form 10BE is on or before the 31st of May, immediately following the financial year in which the donation is received. Know more about Form BD and Form BE by clicking here .
- Deduction under Section 80TTA of the Income Tax Act, 1961
Under section 80TTA, Non-Resident Individual assessees can claim a deduction of the interest amount earned on their savings accounts maintained with the scheduled banks, post offices & cooperative societies in India. However, the maximum amount of deduction allowed is Rupees 10,000.
We hope this article helps you understand much better what deductions you can claim as an assessee who has attained the status of Non-Resident Individual in India. In case you are facing a problem in determining your residential status for the purpose of taxability then refer to our detailed article by clicking here. Also, you can reach out to us if you have any further queries or need any professional assistance while filing a return in India. Our team of experts is always ready to help you all.
