How NRIs Can Benefit From GST Exemption On Insurance Policies

Non-Residents Indian (NRI)

NRIs can claim the Goods and Services Tax (GST) refund on insurance premiums. This amounts to the saving of 18% tax, which is levied on residents.

Refund

NRIs can claim refund on GST on insurance policies, thus reducing their tax liabilities, while also ensuring financial protection for their families in India.

Refund On Health and Life Plans

This refund is applicable on both health insurance and term life insurance premiums in India, provided the conditions required are met.

Integrated Goods and Services Tax (IGST)

Under the sub-clause (iv) of Section 2(6) of the IGST Act, all the payments by NRIs on life insurance premium payment is considered as export of service, hence is eligible for refund.

ULIP Premium

This benefit of refund is not applicable on premiums paid for Unit-linked insurance plans (Ulips).

Eligibility

The refund is based on certain conditions for the insured members, which differs from one insurer to the other.

Requirements

NRIs must have paid premiums through their Non-Resident External Bank Account (NRE). The policyholder also needs to buy insurance for himself or his family members back in India.

Refund Claim and Transactions

An insurer must be GST-registered, and the transaction should also comply with GST regulations. The refund can be claimed by NRIs within the same month or year they pay the health insurance premium.

Tax Residency Certificate (TRC)

A policyholder is also required to have a TRC for the GST refund.

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