Are you an NRI based in the UAE looking to invest in health insurance back in India? If so, you might be navigating through the complexities of choosing a plan that offers the best tax savings.
According to Brijesh Meti, a consultant in the UAE who specializes in decoding tax norms for Indian and international residents, NRIs often encounter hurdles in understanding the tax implications of health insurance purchases in India.
Buying health insurance in India not only provides coverage but also makes you eligible for tax deductions under prevailing Income Tax regulations. Plus, the premiums for Indian plans are generally lower compared to those in other countries. For example, a family of four can get coverage of INR2 million by paying around INR70,000 to INR80,000 annually.
However, it’s important to note that most Indian health insurers typically only reimburse expenses incurred during hospitalization within India. While some policies offer global coverage, the extent of coverage varies, with some limited to emergencies and others requiring approval from Indian resident doctors.
NRIs from countries blacklisted by FATF are often excluded from coverage under Indian health insurance policies. Additionally, there are clauses regarding the duration of stay in India to be eligible for claims outside the country.
In terms of tax benefits, NRIs who pay taxes on income earned in India can claim deductions for health insurance premiums under Section 80D of the Indian Income Tax Act. Senior citizens enjoy higher deduction limits.
Despite the attractive premiums, Indian health insurance may not be suitable for all NRIs, especially those with plans of staying abroad long-term. It’s essential to understand geographical restrictions and pre-existing condition clauses before purchasing a policy.
For NRIs planning to return to India or with short-term stays abroad, buying health insurance in India might be advantageous, considering the tax benefits and pre-existing condition waiting periods. However, for longer stays abroad, it’s advisable to opt for insurance in the country of residence or consider travel insurance when visiting India.
