NRI Queries Simplified: Health Insurance, SIP Timing, & Tax Filing in India
Living overseas can be challenging, especially when it comes to finances and well-being. This blog aims to address major questions for Non-Resident Indians (NRIs) about health insurance, Systematic Investment Plans (SIPs), and Fixed Deposits. Health insurance is crucial due to the COVID-19 pandemic, and SIPs have gained popularity due to social media awareness. The blog also provides information on tax implications and offers advice on organizing finances effectively.
Should NRIs Purchase Health Insurance in India?
It’s a widespread myth among NRIs: “I don’t stay in India, so how come I need health insurance there?” It sounds plausible on the surface. Your company overseas may already have you insured, after all. But the catch is—most international plans don’t cover hospitalization or medical treatment in India unless you’ve purchased global coverage, which can cost an arm and a leg. And even if you come back to India, even for a visit, you might not be covered.
Now imagine this—you go back to India for some months, and while you’re there, you get sick or have an accident. Without health insurance in India, you’re paying cash or rushing to purchase a policy with waiting periods. Yes, that’s the next key thing—waiting periods. Virtually all Indian health insurance policies have a 2-4 year waiting period for pre-existing ailments. If you purchase a policy now, when you settle in India again (even after a couple of years), you’ll already be covered.
And besides, premiums are cheaper when you’re younger and healthier. Postpone it, and you stand to lose more in terms of expenses—or worse still, get rejected for conditions such as autoimmune diseases or diabetes. Finally, NRIs have a special advantage: no GST on premiums. That’s a small but useful saving.
So, should you purchase health insurance in India as an NRI? The answer is straightforward—yes, if you want peace of mind and financial security when you need it most.
What’s the Best Date to Start a Mutual Fund SIP?
Most new mutual fund investors become fixated on one question—what’s the ideal date for SIP investments? Should it be the 1st, 7th, 10th, or 15th of the month?
Here’s a reality check supported by numbers: on an average for the past 10 years, across various dates, SIP returns have hardly reflected any great disparity. The date doesn’t matter much to the market. So what do you do?
Choose a date that suits you. Match it with your income cycle. For instance, if your salary or business income comes into your account in the first week of the month, choose a SIP date such as the 7th or 10th. This way, the SIP will be executed before you begin spending. That’s one of the investing secrets—invest first, spend later.
SIPs have nothing to do with market timing—everything to do with discipline and consistency. Those investors who hold their SIPs through volatile markets will typically end up much richer in the long run. The worst decision isn’t timing the “incorrect” SIP date—it’s either missing SIPs or changing SIP dates frequently owing to fear or market noise.
So go ahead, choose a date that suits your fiscal calendar, put it on autopilot, and let time work its magic.
As an NRI Working Abroad, Should I File Taxes in India?
This is a tricky but critical one. Many NRIs make the mistaken assumption that just because they are earning and residing abroad, they are exempt from paying Indian taxes. But if you earn in India—say, from fixed deposits, rentals, or investments—you might have an obligation to pay taxes.”.
Suppose you are employed in Canada. You also have fixed deposits in India, get monthly rent on a property, and perhaps even dividends or capital appreciation from Indian mutual funds. According to Indian tax law, if your overall income in India is more than ₹4 lakhs (according to the most recent budget for people under 60), you are required to submit an Income Tax Return (ITR).
Filing taxes is not merely a matter of compliance—it’s maintaining your financial hygiene. Filing on time facilitates processes such as repatriation of funds, approval of home loans, or even credit. And even when your income is less than taxable, filing returns provides a paper trail for easy reference in the future.
Don’t wait for a notice from the tax authorities or a remittance block to realize you could have filed sooner. If you’re making something in India, consult a good CA or financial planner and have your tax filing done.
Conclusion
Being an NRI has special financial benefits, but also obligations. Purchasing health insurance in India covers you while you visit or return in the future. SIPs, if wisely selected and on a regular basis, become a great wealth generator. And tax return in India is not optional if you earn above the basic threshold. Taking proactive steps in these three areas will provide you with not only compliance, but also peace of mind—and that’s invaluable.
FAQs
1. Can NRIs buy health insurance in India while living abroad?
Ans- Yes, most insurers allow NRIs to purchase policies online with basic documentation and medical checks.
2. Will my Indian health insurance cover treatment abroad?
Ans- Typically no, unless the plan includes international coverage, which is rare and expensive.
3. What’s the minimum premium for a decent health insurance plan in India?
Ans- Premiums start around ₹7,000 to ₹12,000 annually for a ₹5 lakh cover, depending on age and city.
4. Can I claim tax benefits in India for the health insurance I buy as an NRI?
Ans- Yes, under Section 80D, even NRIs can claim deductions, but only for policies covering Indian residents.
5. Is it better to invest in SIPs in INR or in foreign currency?
Ans- Indian mutual funds accept investments in INR. You can remit funds via NRE/NRO accounts for this.
6. Should I pause SIPs during market downturns?
Ans- No. That defeats the purpose. SIPs work best when continued through market ups and downs.
7. Will I be taxed in India if I invest in Indian mutual funds as an NRI?
Ans- Yes, capital gains are taxable based on the holding period and type of fund.
8. Is rental income taxable in India if I already pay tax abroad?
Ans- Yes. Rental income is taxable in India. You can claim relief under DTAA if applicable.
9. What if I forget to file taxes in India as an NRI?
Ans- You may face penalties, interest on dues, and issues with fund repatriation or future filings.
10. Can I file taxes in India from abroad?
Ans- Absolutely. The entire process is now digital. You can use a CA or file directly via the Income Tax portal.
Disclaimer: The information provided here is for educational and informational purposes only and should not be construed as financial, legal, or tax advice. Consult with a qualified professional before making any investment decisions. We do not accept any liability for errors or omissions in this information nor any direct, indirect, or consequential losses arising from its use.
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