Smart health insurance buys in India can unlock tax perks for UAE-based NRIs

Dubai: For Non-Resident Indians (NRIs) living in the UAE, buying health insurance in India might sound counterintuitive—especially if you're already covered where you live. But if you're earning taxable income in India or plan to return home eventually, a policy purchased back home could unlock tax breaks and cost advantages that are too good to ignore.

"Many NRIs don’t realise that premiums paid for Indian health insurance are tax-deductible under Section 80D of the Income Tax Act," says Brijesh Meti, a Dubai-based financial consultant. That’s up to INR25,000 (Dh1,237) per year for yourself, your spouse, and children—and INR50,000 (Dh2,474) if you're over 60.

Plus, premiums in India are far cheaper than in the UAE or elsewhere. For example, a family of four can get INR2 million (Dh98,967) in cover for just INR70,000–80,000 (Dh3,463–3,958) per year. And here's the kicker: NRIs can save on the 18% GST typically charged on premiums by submitting a declaration form to the insurer. If GST was already paid, a refund can be claimed.

What’s the catch?

But before you rush to buy, know this: most Indian health policies only cover treatment in India.

"If you get hospitalised in Dubai, your Indian plan typically won’t pay out," warns Masher Suleiman, a tax planning specialist in Abu Dhabi. Some insurers offer “global cover,” but many limit this to emergencies or planned procedures — and usually at a higher premium with heavy co-payments.

Also, if your family stays in India while you're abroad, a ‘family floater’ policy is still valid. But if everyone is outside India, your policy may no longer serve its purpose unless it offers international protection.

Who can (and can’t) buy?

There are restrictions for NRIs from FATF-blacklisted countries — and some policies require you to be in India at least six months a year to remain eligible. So it’s crucial to read the fine print or consult an advisor before committing.

Another watch-out? Pre-existing conditions and newborns often come with a waiting period of 1–4 years. So if you're planning a return to India—or even a short move—it’s wise to buy a policy now and get through the waiting phase early.

Planning a trip to India?

Even if you’re just visiting for a week, don’t skip medical insurance. “You can now get tailored travel medical plans for as low as INR1,600 (Dh79) with coverage up to INR2 million,” says Meti. “But be sure to check for co-payment clauses.”

Bottom line for UAE NRIs

If you're planning to return to India within a few years, or if you earn taxable income in India, buying health insurance there makes sense—not just for the tax breaks, but for peace of mind. Just be sure to match your policy to your lifestyle and plans.

If your stay abroad is long-term? Keep your Indian policy only if it’s already active—and for trips home, supplement it with travel insurance.