Photo: iStock
Photo: iStock

NRIs can claim tax break for health plan premiums paid for dependant parents

Only residents can claim benefit for maintenance, including medical treatment of a dependant with a disability

I am an NRI living in Singapore. I pay the health insurance premium for a policy that I have bought for my parents. Can I claim tax deduction on that?

—Ramesh Iyer

As per Section 80D of the Income-tax Act, 1961, deduction can be claimed for health insurance premiums paid in India to insure the health of self and dependants including parents. Even though you are an NRI, you are eligible to claim this deduction from your total taxable income.

I recently sold my properties and have 20 crore in my account. I also have some savings and investments of 4 crore. I wish to send 10-12 crore to my son who lives in the UK. What is the right procedure to transfer money as I believe you can only transfer $1 million in a financial year? Can I transfer half the money now and half the money in April after the financial year is over? I can also transfer the money to his wife. They are both NRIs. Please advise what to do as the transfer amount is substantial.

—Sagar Mathur

As per the Liberalised Remittance Scheme, resident individuals are allowed to send $250,000 per financial year for permissible transactions. This is the aggregate amount you can transfer in one financial year, therefore you need to plan accordingly.

Also, you need to make sure that you have deposited the relevant capital gains tax or claimed exemption, as the case may be, in case you sold a property situated in India. Also, you need to make sure that you report the sale transaction while filing your income tax return in India. There is no tax implication for you or your son or his wife towards receipt of money as a gift made to them.

I am planning to move to India this year and our child is autistic. Can I claim tax deduction under Section 80DD for my child’s medical and nursing expenses?

—Name withheld on request

Tax deduction under Section 80DD is allowed for maintenance, including medical treatment of a dependant with a disability. However, only those taxpayers who are residents in India can claim this deduction. On your return, you may not immediately become a resident of India for tax purposes and, therefore, you will not be allowed to claim this deduction immediately. Once you become a resident in India for tax purposes, you will be eligible to claim this deduction.

I am an NRI living in Dubai and I have a rented property in Sharjah and one in Dubai. I also have rented properties in Pune and Mumbai. Do I need to disclose my properties abroad while filing tax returns in India?

—Shivam Raheja

Assuming you are an NRI as per the income tax law in India, you are not required to report foreign assets held by you in your Indian tax return.

Archit Gupta is founder and chief executive officer, ClearTax. Queries at mintmoney@livemint.com

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