How Can NRIs Save Taxes on Health Insurance in India?

Health insurance is an essential buy for people in India as well as NRIs settled abroad. In fact, NRIs are increasingly buying medical insurance from India to ensure medical coverage during their visit back home and cover their families living in India. But wait, there’s more! NRIs can also save tax by getting a GST refund on health insurance premiums in India. Read on to know more.

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      GST Refund on Health Insurance for NRIs

      NRIs who buy medical insurance from an insurance company in India are eligible for a GST refund on the premium amount. As per the tax laws in India, NRIs paying tax in their foreign country of residence are eligible for a GST (Goods and Service Tax) refund on health insurance premiums paid in India. This refund is provided to prevent NRIs from paying tax twice – once in India and once in their foreign city of residence.

      However, NRIs who do not have a taxable income in their foreign country of residence and pay tax back in India will not be eligible for a GST refund on health insurance premiums. Such people can avail tax deductions on the premium paid to buy health insurance in India as per Section 80D of the Income Tax Act, 1961.

      Moreover, NRIs must opt for the GST refund option while buying medical insurance in India.

      Things to Keep in Mind to Get a GST Refund on Health Insurance for NRIs

      Check out a few points that NRIs must keep in mind to get a GST refund on health insurance purchased from India:

      • The NRI proposer must be one of the insured members of the medical insurance policy.
      • Only health plans with an annual mode of payment are eligible for a GST refund.
      • The premium should be paid using an NRE (Non-Resident External) account.
      • NRIs should have stayed abroad for at least 180 days to be eligible for a GST refund.
      • GST refund is not provided automatically but needs to be opted for deliberately while buying/renewing the health policy.
      • NRIs can also get a GST refund on buying health insurance for parents living in India if they are the proposer.
      • Keep all the required documents handy before applying for the GST refund.
      • NRIs can only get a GST refund on renewals if they have taken a GST refund while buying the fresh policy from India.

      How Can NRIs Get a GST Refund on Health Insurance Bought in India?

      NRIs can follow the process listed below to obtain a GST refund on the health insurance policy purchased from Policybazaar.com:

      • Go to the ‘Health Insurance’ icon on the homepage and provide the requested details
      • Enter the international calling code for your foreign country of residence and your overseas phone number
      • Choose the health insurance for NRIs plan to be purchased and fill up the proposal form
      • Pay the premium amount using your NRE account
      • Once the payment is complete, share the documents required to get a GST refund
      • Raise a GST refund request by contacting Policybazaar

      The insurance company will issue a GST refund within 15 days after verifying all the submitted documents.

      Which Documents are Required to Get a GST Refund on Health Insurance for NRIs?

      NRIs must provide the following documents to the insurance company in India to get a GST refund on health insurance premiums:

      • KYC documents, including an Aadhaar card, passport, etc.
      • Tax Residency Certificate (TRC)
      • International address proof of the foreign country, such as international driving license, utility bill, etc.
      • Last six months’ bank statement of the NRE account used to pay the premium
      • Declaration

      Please note that the list of documents may vary from one insurance company to another.

      Summing It Up

      Health insurance offers dual benefits to NRIs – comprehensive medical coverage and a refund of GST. The GST refund option allows NRIs to avoid paying taxes in two countries without hampering their medical coverage. Just make sure to check the eligibility criteria and keep all the documents handy to get your GST refund without any hassles.

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