Vipin Upadhyay on Recodification of Section 80D and NRI Tax Deduction Framework under ITA 2025
Recent clarifications surrounding health insurance deductions for Non-Resident Indians (NRIs) under the evolving Income Tax framework have brought renewed focus to compliance structuring and documentation standards.
Commenting on the development, Vipin Upadhyay, stated: “The benefit currently available under Section 80D has been recodified as Section 126 within the personal tax incentives chapter, with the same policy intent and monetary thresholds continuing for individual, family floater, and parental cover.”
He further clarified the scope of applicability for NRIs: “The deduction applies only against income chargeable to tax in India. If a person has no taxable income in India, the deduction cannot be utilised even if the premium is paid, as it can be claimed only against income earned in India, such as rent, interest from investments, capital gains, or business income.”
Highlighting the compliance implications under the ITA 2025 framework, Vipin added: “Insurer reporting, annual information statement (AIS) pre-fill, payment traceability, and PAN-linked disclosures will play a central role in substantiating claims, making documentation and regime selection critical for NRIs going forward.”
His remarks highlight that while the policy intent of health insurance deductions remains consistent, the compliance architecture is becoming increasingly data-driven and cross-verified. For NRIs, effective tax planning will require careful alignment between taxable Indian income, documentation standards, and digital reporting mechanisms under the new regime.
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