Tax Benefits of ULIP Plans for NRIs

Buy a Life Insurance Plan in a few clicks


Now you can buy life insurance plan online.

Kotak e-Term Plan

Kotak e-Term Plan provides a high level of protection to your loved ones in your absence. Know more

Kotak Guaranteed Savings Plan

Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality. Know more

Kotak E-Invest

Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs. Know more

Kotak Health Shield

Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability. Know more

Kotak Lifetime Income Plan

Kotak Lifetime Income Plan gives you the security of your income continuing throughout your life and in your absence throughout your spouse's lifetime! Know more

Tax Benefits of ULIP Plans Available for NRIs

Tax Benefits of ULIP Plans Available for NRIs
  • 6th Jul 2022 |
  • 2,507

Indian citizens who have shifted abroad and are residing out of the country for a short tenure are called Non-Resident Indian or NRIs. Being Indian citizens, they can avail themselves of all the benefits allocated to an Indian citizen. Similarly, they entertain the full right to invest money in India and enjoy various investment benefits. An NRI is eligible to use all the tax benefits on their investments in India. Unit Linked Insurance Plans, abbreviated and popularly known as ULIPs, have become a popular investment option among the NRIs.

Let’s look at the ULIP tax benefits available for NRIs and how they can be helpful for them.

ULIP: A Reliable Investment Option

As a ULIP policyholder, an NRI can avail tax exemption on their plan under the guidelines of the Income Tax Act, 1961. This allows them to save more money because investing in ULIPs gives them the option to save more tax.

So, an NRI can opt for different financial avenues in India to build more on their savings. This not only allows them to be assured of their financial growth and stability but, at the same time, allows them to build up a decent corpus back at their home while saving income tax.

ULIP Tax Benefits For NRIs

There are two types of ULIP tax benefits for NRIs. They are:

  • Tax benefits on the premiums paid
  • Tax benefits on the maturity and claims post-demise of the policyholder

Let’s understand the ULIP tax benefits available for NRIs in detail:

1. Tax benefits on the premiums paid

All the ULIP policyholders, Indian or NRI, are eligible to get tax treatment on the premiums they pay for their ULIP policy as per the guidelines of Section 80C of the Income Tax Act.

According to this act, a deduction of up to ₹1.5 lakhs is allowed on premiums paid. Any amount above this will be taxable. Although, as a ULIP policyholder, you must note that these tax benefits are only applicable if the premium amount is equal to or less than 20% of the sum assured for plans issued post 2012.

2. Tax benefits maturity and death claims

A policyholder or the nominee is eligible for tax benefits on the maturity amount or the death benefits under Section 10 (10D) of the Income Tax Act. As per this act, a policyholder will not have to pay income tax on the maturity amount. Otherwise, in the event of the policyholder’s demise, the nominee will not have to pay income tax for the sum received as the death benefit.

However, the maturity benefits are subject to some provisions of Section 10 (10D) of the Income Tax Act.

-For ULIP plans that have been issued before Feb 2021, the maturity tax benefit is applicable only when the ULIP premium amount is less than or equal to 20% of the total ULIP sum assured.

-However, for the ULIP plans that have been issued after Feb 2021, the scenarios change to the ULIP premium amount being less than or equal to ₹2.5 Lakhs.

How to Invest in India to take ULIP Tax Benefits Available for NRIs?

Foreign Exchange Management Act (FEMA) allows the NRIs to invest in India. However, investing in India as an NRI involves an elaborated documentation procedure that one must know about. As FEMA allows investment in ULIP policies, it also opens the door to ULIP tax benefits for NRIs.

So, if an NRI wants to take the tax benefits of ULIP policies, they must look for the right ULIP policy that best matches their financial requirements. Once the ULIP policy is finalized, NRIs will be required to fill out the policy application form and provide the below-mentioned documents:

- A copy of their passport (Scanned)

- Passport-sized photograph (recent)

- Proof of residence (Indian)

- Proof of residence (overseas)

- Proof of income (valid source of income)

- Copy of PAN card Form 60 (For the NRIs earning in India)

- Foreign Residency Supplementary questionnaire

- Medical examination (If required by the company)

- Copy of Person of Indian Origin (PIO) card

- Copy of Overseas Citizenship of India (OCI) card, etc.


Overall, ULIP tax benefits for NRIs are a great way to save taxes in India. Also, along with market-linked investment options, NRIs get the added benefit of life insurance with ULIP. This makes ULIP an excellent choice for investment in India while allowing tax benefits on your hard-earned money.

Kotak Guaranteed Savings Plan


  • Enhanced Protection Through Riders
  • Life Cover
  • Tax Savings
  • Multiple Premium Payment Terms
  • @ Guaranteed Loyalty Additions
  • Accrued Guaranteed@ Additions

Ref. No. KLI/22-23/E-BB/490


Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

9 Tax Changes in Budget 2019 that may Impact Your Personal Financial Planning

ITR 1: Sahaj Form

Presumptive Taxation for Business and Profession

What is Form 16A?

Types of Income Tax Return (ITR) Forms

How to Check Income Tax Returns Status Onine?

Tax Deductions You MUST Know

आयकर स्लैब 2021-2022

Save Income Tax by 31st March: Here Is a Checklist

How to Download Form 16?

Tax Saving for Self Employed in India

Interest Imposed Under Section 234A, 234B and 234C

E-Filing of Income Tax Returns in India

Financial Planning and Best investment options for Housewives

Income Tax Deductions & Exemptions under Sections 80C, 80D & 80DDB for FY 2020-21 & 2021-22

What are the Tax Benefits of Sukanya Samriddhi Yojana (SSY)?

What is Challan 280? How to Pay your Income Tax Online with Challan 280?

Insurance and Endowment: Everything You Need to Know!

All about Online Income Tax Calculator

What are Direct Taxes? How to Avoid being Overtaxed?

What is the TDS Rate on Salary?

Section 10 (10d) of Income Tax Act, 1961 on Payouts of Life Insurance Policy

Section 80E: Tax Exemption on Interest on Education Loan

How to save tax for salaried person?

List of Important Income Tax FAQs

Section 80C Deductions as per Income Tax Act, 1961

All about TDS on Salary under Section 192 – Kotak Life

Impact of GST on Life Insurance in India

How to e file ITR on Income Tax Government Portal

What is TDS Slab?

How Much Money This Budget 2019 Can Help You Save

Income Tax Benefits for Doctors

Guide for Tax Calculation on your Salary

Investing Lump Sum Amount

What is the Difference Direct Tax and Indirect Tax

What is Section 80CCC of the Income Tax Act 1961

Section 80G of Income Tax Act

How to File TDS Return?

How do I Calculate My Term Insurance Premium

What is TDS Exemption Limit?

What Investment Options Come with Tax Incentives?

ITR 2 Form – Complete Guide

Tax Planning and Tax Benefits of Life Insurance

Tax-Savings Investments and Options in India

How to File Income Tax Return - Everything You Need To Know

How to File Income Tax Return for First Time Tax Payers

Income Tax Slabs and Rates in India for FY 2021-22/AY 2022-23

What is Section 10D of the Income Tax Act?

Income Tax Deductions for Disabled Person Under Section 80U

What is Tax Evasion and What Are The Penalties For Tax Evasion In India?

LTC Cash Voucher Scheme October 2020 – Everything You Need to Know

What Is Salary Protection Insurance and Why You Need It

What Is Advance Tax and How Is It Calculated?

Why January Is an Important Month for Saving Tax?

What is the Difference between Form 16 and Form 16A?

What is House Rent Allowance and How is HRA Exemption Calculated?

What is Tax Deduction at Source (TDS)?

Do Beneficiaries Pay Taxes on Life Insurance?

Received an Income Tax Notice? Your Guide to Understanding Intimations under Section 143 (1)

Pradhan Mantri Suraksha Bima Yojana

How to File Income Tax Return without Form 16

What are the Different Types of Taxes in India?

Tips to plan your savings in 2019

What is the Last ITR Filing Date and Penalty for Late Filing of ITR?

Tax Season Is Coming- Know How to Save Tax

Income Tax Filing Using Multiple Form 16

Income Tax Exemption for Disabled

What is the Percentage of Tax Deducted at Source (TDS)?

Income Tax Deduction Under Section 80CCC In India

Income Tax Filing For NRI in India

Difference between Section 80C and 80CCC of the Income Tax Act, 1961

Tax-Free Income in India

Tax Saving Options other than Section 80C

Tax Benefits for Startups in India

Tax Saving Tips: Best Ways to Save Income Tax for 2021

How to File Form 10E for Tax Relief on Salary Arrears?

What is Section 80C Deduction?

ITR-6: Guide to filing ITR-6 Form online

9 Income Tax Myths That Could Cost You Money while Filing returns

Penalty For Late Filing TDS Return

How to View 26AS and Download Form 26AS Online

Form 16, Form 16A, and Form 16B?

What is Section 80C - Explained in Detail

What is Section 195 of the Income Tax Act? TDS on Non-Residents of India

Guaranteed Return Plans-Why is it a must for you?

A Guide to Life Insurance Policy’s Tax Benefits and Taxability

Types of Riders in Insurance Policy

How to File Form 16 for Salaried Employees?

Why is Form 16 Important?

How to File ITR Online

Home Investment Plan to Buy Dream Home

Section 44AD of Income Tax Act for AY 2020-21

All about TDS Payment Online & Due Dates

Budget 2019: Impact on the Common Man in India

How To Save Tax Using Life Insurance?

Can You Get Term Insurance Without Income Proof?

Difference between Section 80C, 80CCC, 80CCD & 80D

What is ITR & How to File Income Tax Return

How to Claim TDS Refund for Excess TDS Deduction

Tax Saving Options for Salaried Employees

How to Pay Advance Tax Online in India

How can I get Form 16B from traces?

7 Important Things to Remember While Investing in a Savings Investment Plan

Tax Structure in India

Sub-sections Under Section 80C of the Income Tax Act, 1961

How To Save Tax Better with 80C

What is Form 16B?

Income Tax Deductions Under Section 80C

Section 80D - Medical and Health Insurance Tax Benefits Under Section 80D

Tax Saving Guide for 2019-20

Are Financial Planning and Tax Planning the Same Thing?

Have You Considered Term Insurance a Part of Your Tax Planning?

A Comprehensive Guide to Understand the ITR 7 Form

How to e-Verify your Income Tax Return

Problems People Face with Tax Returns after a Job Change

Everything You Need to Know About Tax Benefits of National Pension Scheme (NPS)

What is Form 26AS - All You Need To Know

Top 8 Tax-Saving Methods in India- Budget Planning

How to Save Income Tax with Insurance

9 Point Guide on how to File Income Tax Return Online

Section 16 of the Income Tax Act (ITA), 1961

When Should TDS be Deducted and Who is Liable to Deduct it?

What is Section 80C Deduction Limit?

How to Get Form 16?

Income Tax Exemption for Physically Handicapped Dependent

Understanding Tax Exemptions in ULIP (Old and New)

Why Tax Planning Should Be an All-year Round Activity

Union Budget Highlights – 1st February 2022

Tax Exemption and Scope of Coverage

Saving Income tax in 2017 - 18

52 Weeks Savings Plan: Daily Savings Plans for a Better Tomorrow

5 Popular Tax-Saving Schemes in India

What To Do If Your TDS Is Not Deposited With The Government?

Things to Do After Filing Income Tax Returns

5 Unusual Investments You Didn't Know for Saving Taxes in India

TDS Due Dates of FY 2020-21 For Return Filing

Tax Benefit of Investing in Term Plan

Investment Proofs You Need Submit To Lower TDS Cut From Your Salary

Role of Life Insurance in Your Financial Portfolio

The Difference Between Gross Income & Total Income in Calculating Income Tax

How to Check Income Tax Refund Status Online in India

What is TDS Refund Process?

What is ITR 5 Form and How to File ITR 5?

A Complete Guide for Filing ITR 3 Form

How to Save Tax on Salary Arrears?

How to file Form 16 online?

All You Need to Know About Section 80C

How to Check Income Tax Refund Status Online in India

How to View 26AS and Download Form 26AS Online?

Financial Benefits and Government Schemes Every Woman in India Should Know