1️⃣ What happens to maturity proceeds from IFSC insurance policies for NRIs?
👉 Answer: From 1st April 2025, if you hold a life insurance policy issued by an insurer in an IFSC (like GIFT City), the maturity proceeds will be 100% tax-exempt in India—provided the annual premium never exceeds 10% of the sum assured.
🔑 Key Insight: This is a huge tax advantage for NRIs compared to domestic policies, where the exemption is more restricted.
💡 Example: Rajesh, an NRI in Dubai, buys an IFSC policy with a ₹50 lakh sum assured. As long as his yearly premium ≤ ₹5 lakh (10%), his maturity proceeds remain tax-free.
2️⃣ Are death benefits from such policies also exempt?
👉 Answer: Yes! Proceeds paid on death are always tax-free, even if the premium exceeds 10% of the sum assured.
💡 Example: Suppose Rajesh paid ₹7 lakh annually on a ₹50 lakh policy. His maturity proceeds wouldn’t be exempt. But if he unfortunately passes away, his nominee still receives the full sum assured—without any tax deduction.
3️⃣ Does this exemption also apply to whole life insurance?
👉 Answer: Absolutely. For whole life insurance (covering up to 99 years), the same rule applies:
• ✅ Maturity proceeds tax-free if annual premium ≤ 10% of sum assured.
• ✅ Death proceeds always tax-free (no premium condition).
4️⃣ How is “long-term” property defined for NRIs in India?
👉 Answer: Any immovable property (house, land, flat) held for more than 24 months is treated as a long-term capital asset.
🔑 Key Insight: For inherited property, the original owner’s holding period counts.
💡 Example: If Priya inherits her father’s flat bought in 2015 and sells it in 2025, it’s considered a long-term asset, even though she held it only for a year.
5️⃣ What are the TDS rates for NRIs selling property in India?
👉 Answer:
• Short-term gains (≤ 24 months): TDS @ 30%
• Long-term gains (> 24 months): TDS @ 12.5% + surcharge + cess
6️⃣ Is TDS on the entire sale value or only on capital gains?
👉 Answer: Technically, only on capital gains.
But in practice, buyers deduct TDS on the full sale consideration unless the NRI obtains a lower/nil deduction certificate (Form 13) from the tax officer.
💡 Example: If a property is sold for ₹1 crore and the gain is only ₹30 lakh, TDS should ideally apply to ₹30 lakh. But buyers often deduct on ₹1 crore to be safe.
7️⃣ What changed in the Finance Act 2025 for NRIs?
👉 Answer: The Finance Act 2025 gave a big relief: Maturity proceeds from IFSC life insurance policies are fully exempt (from 1 April 2025) if premium ≤ 10% of sum assured.
🔑 Key Insight: This positions IFSC policies as tax-efficient investment tools for NRIs.
8️⃣ How can NRIs selling inherited property ensure correct TDS?
👉 Answer:
• Confirm whether the property is long-term or short-term (include parent’s holding period).
• Apply for a Lower TDS Certificate in advance to avoid excess deduction.
• Keep documents ready—purchase deed, inheritance papers, and cost details.
💡 Example: Aarav sells inherited land for ₹1.2 crore. Actual LTCG = ₹25 lakh. Without a certificate, buyer may deduct TDS on full ₹1.2 crore (i.e., ₹15 lakh). With a certificate, TDS applies only on ₹25 lakh (₹3 lakh).
📝 Final Thoughts
✅ IFSC insurance policies are now a smart tax-saving option for NRIs.
✅ Death benefits from such policies are always tax-free.
✅ For property sales, long-term vs short-term makes all the difference.
✅ Always secure a lower TDS certificate to avoid blocking big amounts in refunds.
💡 As an NRI, staying updated on these small details ensures you save tax, avoid cash-flow issues, and stay compliant with Indian laws.