NRIs Income Tax Deduction for Financial Year 2014-15

by Kim Gill Writer

Non-residents of India (NRIs) want to equivalent residents in tax savings. Legally, residents enjoy an edge over these migrants. But the tax-deduction policies of financial year (FY) 2014-15 for both are more or less same in India.

S2NRI has brought it as an update to the NRI legal services. An NRI becomes eligible for paying income tax if his/her income exceeds Rs. 2,50,000 in the FY 2014-15. Granting NRIs wish to win deduction in Income Tax, the government of India has allowed it in the similar way as residents enjoy it. Section 80C makes all the NRIs IT payers happy by claiming deduction from their gross Income. This financial year, their limit of deduction is maximized upto Rs. 1, 50,000 under the same Section. Now, he can file Income tax return while deducting their tax.

Allowed ‘Deductions’ to NRIs is below to check out:

Life insurance payment premium- This deduction is allowed to NRIs, if the NRI purchase Life Insurance policy for self, or child (major/minor/ dependent/ independent/ married/ unmarried) or spouse. But it must be remembered that the premium must be restricted below 10 percent of the sum assured.
Tuition fee: If an NRI pays ‘Tuition’ fee of his/ her children (maximum 2), including pre-nursery, nursery or play school or for full time education, then he is an eligible to enjoy deduction in IT.
Principal repayments on loan for purchase of house property: This deduction is yours for the repayment on loan that was taken for the purchase of house or property. This redemption is allowed for stamp duty, registration fees & other expenses incurred for the transfer of the property to the NRI.
ULIPS or Unit Linked insurance plan: You can enjoy this deduction on Unit Linked Insurance Plan of LIC Mutual Fund, for instance, Dhanraksha 1989 & investment in other ULIP of UTI.

Apart from the foregone deductions, more ‘Deductions’ in Income tax for NRIs are allowed. You can get clues from the listed below significant points to make out more deductions:

1) On house property income:

Calculated on: Home Loan

Vacant property: Deduction: worth Rs. 2,00, 000

Rental property: Deduction: Interest out go

Deduction from property tax on rental property: cut off by 30% as standard deduction.

2) Deduction under Section 80 D:
Calculated on: Health Insurance Premium

On Health Insurance Premium for: Self, spouse or dependent child or family person (living in India)

Deduction:

worth Rs. 15,000 for self, spouse or dependent children
worth Rs. 20,000 for senior citizen parents
worth Rs. 15,000 for parents (not come in senior citizenship in FY 2014-15)

3) Deduction under Section 80 E:

Calculated on: Education Loan for: Self, spouse, children or as guardian of another child
How much? - Limit undefined
How long? - Maximum 8 years or till the maturity date of education loan.

4) Deduction under Section 80 G:

Calculated on: Eligible Donation as per Income Tax Act

5) Deduction under Section 80TTA:

Calculated on: Saving Account with bank or co-operative society or post office of FY 2012-13
Deduction: Upto Rs. 10,000 (maximum limit)