I’m an NRI living in the US and preparing my Indian income tax return for FY 2025-26. I have some income in India from bank interest and a property, and I’m trying to understand whether I can claim deductions under Section 80C.
I’ve been reading that NRIs can claim some Indian tax deductions, but I’m getting conflicting information about Section 80C. Some websites say NRIs are eligible, while others make it sound like Section 80C is mainly for resident taxpayers.
I have an LIC policy in India and also made some eligible investments during the financial year. I’m wondering whether these can be included under Section 80C when I file my ITR as an NRI.
A few questions I have:
I’m planning to use the old tax regime if that makes a difference.
Has anyone recently filed an Indian ITR as an NRI and claimed Section 80C? I'd be interested in knowing what documents you kept and whether the deduction appeared correctly in the ITR.
I had the same confusion because I thought being an NRI meant I couldn't claim any deductions.
The way I understood it is that you need to distinguish between NRI status and the conditions attached to a particular deduction.
For example, the Income Tax Department's current NRI guidance does list 80C as an available deduction and gives the ₹1.5 lakh combined limit.
But don't assume every investment you make qualifies. You have to check the specific 80C provision applicable to that payment.
Also, if you're filing under the new tax regime, 80C isn't available. The current ITR guidance says that if the taxpayer hasn't opted for the old regime, only certain deductions such as employer NPS contribution under 80CCD(2) and 80CCH are enabled.
I would therefore make a list of your actual investments first rather than just entering ₹1.5 lakh because that's the maximum.
Keep the receipts, policy numbers and other supporting documents too. The current ITR guidance requires details such as the eligible amount and policy/document identification number when claiming 80C.
Yes, NRIs aren't automatically excluded from Section 80C just because they are non-residents. The bigger issue is whether the particular payment or investment qualifies under the applicable provisions and whether you're using the tax regime that permits the deduction.
I filed as an NRI previously and claimed an eligible deduction for an Indian insurance policy. I kept the premium receipt and policy documents with my tax records.
The current Income Tax Department guidance for Non-Resident Individuals for AY 2026-27 specifically lists Section 80C and includes items such as life insurance premiums, provident fund, certain equity investments, tuition fees, National Savings Certificates and housing-loan principal. The combined Section 80C limit shown by the department is ₹1,50,000.
One important point is the tax regime. Section 80C is generally a deduction associated with the old tax regime. The Income Tax Department's current guidance says that under the new regime, most Chapter VI-A deductions, including 80C, cannot be claimed.
So I'd first confirm which regime you're filing under and then check whether your specific payment qualifies.
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One thing I'd be careful about is home-loan principal repayment.
If you're an NRI who owns property in India, don't assume that every payment connected with the property automatically qualifies under 80C. The nature of the payment and the conditions of the provision matter.
The Income Tax Department's AY 2026-27 guidance specifically lists housing-loan principal among the payments covered by Section 80C, along with life insurance premiums, provident fund, NSCs and certain other investments.
I'd also keep the loan statement and repayment certificate rather than relying only on your bank statement.
Another thing people sometimes miss is that Section 80C has a combined limit of ₹1.5 lakh. You don't get ₹1.5 lakh separately for every eligible investment. The various eligible 80C payments are aggregated within that limit.
For anything involving a foreign income situation, large investment or unusual transaction, I'd verify the current rules rather than relying entirely on another NRI's experience.