For any hard-working and financially-prudent individual, health insurance is a critical product to include in their financial portfolio. If you are an NRI, buying health insurance in India becomes all the more important for you as it helps you safeguard your family back home or even yourself should you seek medical advice when visiting the home country. It is always advisable to buy an appropriate health plan in India at an early age, because the more you wait, the higher the risk of there being complications related to pre-existing diseases.

The good news is that the taxation rules for NRIs give you an additional benefit upon buying an Indian health insurance plan. Since you already pay tax in your country of residence, you can get a GST refund on your Indian health insurance plan. All you need to keep in mind is that you fit into the eligibility criteria for your insurer and opt for a GST refund option while purchasing your policy.

Let us take you through all the information you will need to take advantage of this benefit:

Who can apply?

The eligibility criteria for GST refund on health insurance starts with the proposer. The proposer, in the context of health insurance, is the individual responsible for initiating and applying for the insurance policy on behalf of themselves or others.

To qualify for GST refunds on health insurance, the proposer must be a Non-Resident Indian (NRI). While the proposer must be an NRI for eligibility, the criteria for insured members may differ among insurance providers. The specific requirements and eligibility of insured members may vary between insurers.

The payment for health insurance premiums is required to be made annually for all providers. And, the payments must be made from an NRE (Non-Resident External) Account, ensuring that the funds used to pay premiums are sourced from external sources.

Documents you will need…

The next important step is to be mindful of the documents you will need to submit to qualify for a GST refund. The exact documentation requirements may vary between insurers.  Typically, a standard requirement among insurers in the KYC (Know Your Customer) document. These documents ensure the legitimacy of the policyholder and are consistent across providers. Depending on the insurer you pick, you may also be required to submit a TRC (Tax Residency Certificate), an International Address Proof, Passport, PAN Card, and a recent photograph. For your international address proof, you can use your utility bill, driving license, a bank statement, or a government ID card / certificate. You must have been residing in the foreign country for more than 180 days in order for you to be eligible.

When applying for the refund, you may be asked to furnish your NRE account bank account statement with entry of premium paid.

The GST refund process for health insurance policies involves verification of documents and issuance of the policy. The turnaround time (TAT) for the GST refund is uniform, with refunds expected to be processed within 15 days post-policy issuance.

Why you should buy now

In recent years, there has been a notable trend of NRIs returning to India, driven by various factors including career opportunities, family considerations, and a desire to reconnect with their roots. Reports suggest that almost 60% of NRIs living in the US, the UK, Canada, Australia, and Singapore plan on coming back to India during their retirement years. During retirement, increasing age makes one more prone to health issues, making it difficult for one to get the best policy at affordable premiums. A timely purchase provides you with an appropriate safety net for life.

In conclusion, when it comes to GST refund eligibility on health insurance policies, the NRI status of the proposer is a common criterion. However, the specific requirements and eligibility criteria for insured members, documentation, and other details may vary between different insurance providers.

Understanding these criteria is crucial for individuals seeking to maximize their benefits and potentially receive GST refunds on their health insurance premiums. It is essential to consult with the respective insurance providers and adhere to their specific requirements to ensure that you make the most of your investment.

(By Siddharth Singhal, Business Head – Health Insurance, Policybazaar.com. Views are personal)