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1st Feb 2021, India witnessed a roaring Budget 2021, completely in favor of the Indian-origin, amidst the near-end of the coronavirus-hit economy. The Finance Minister of India presented startling financial facts across various industries with key themes around: Banking, Infrastructure, Housing, etc. The Union Budget 2021 was presented ‘digitally’ (paperless) for the first time. The framework of the budget was clearly to give a massive ‘push’ to the Indian economy.

Below are select financial insights & strategies that we could bring forward for Indian-origin (PIO, OCI, NRI & Expats) worldwide. Whether employed internationally or in business, these recommendations would help scale your wealth up, along with the 5 Trillion-dollar India growth story. Exactly, what the budget brings to you from its top-drawer.

1. Earnings of elderly/ Senior Citizens in your family, aged 75 years or above, in pensions or interest incomes, would have limited tax-deduction at the bank only. There is no need for them to file ITR (Income Tax Returns) in India, anymore.

Strategy: Within the family, India does not attract any gift-tax on any sum of money given to a family member. So, you could gift any sums of your earnings to a senior citizen in your family (in approved relations), cross-country. The interest earnings that an elder member receives on these sums, will only be taxed at a minimal level. If they invested the amount in Fixed Deposits (FDs) or in Pensions (including Life Insurance pension products), they yet wouldn’t be paying higher tax as that of yours. Plus, there won’t be any headache of filing taxes for seniors as the bank will have to maintain all the tax deductions & report out self. For an Indian-origin (PIO, OCI. NRI & Expats) with senior family members in his/ her direct family in India, it makes sense to transfer your tax-paid monies to elders’/ parents’ bank accounts (whether even managed by you) to take advantage of growing your corpus significantly, with limited tax outgo.

2. Foreign Direct Investments (FDI) in Insurance sectors raised from 49% to 74%. This is to help an Indian-origin (salaried or business owner) have the best investments in India through the insurance savings route.

Strategy: In a bid to attract global Indian-origin outside (PIO, OCI, NRI & Expats) to invest into life insurance products, saving plans or market-linked products in India, taking benefits of higher returns from Indian-collaborated world insurers, the finance ministry drastically raised the limits of FDI in budget 2021. This opens the gates for world insurers to come into India, and we clearly see a series of high quality – Coverage Plans (like: term life covers or term plans), guaranteed return products (returning 4% to 9% fixed per year), or even the booming market products (10% & higher up) getting launched. It gives an advantage to an Indian-origin now to invest directly in India, sitting outside.

We encourage you to avail your investment options, as now you can even invest in global currencies in India (or your home country currency), in most safety-oriented products. You could pay through your local home country bank or your NRE/ NRO (Non-Resident External or Non-Resident Ordinary) bank accounts, with any bank, as well. All your maturities & redemptions come back swiftly in your NRE bank account, making it easily repatriable later to the country of your choice. Further, investing in currency would get you a currency hedge on these products as long as you keep paying, as well as, waive-off the entire Goods & Services Tax (GST), which you don’t have to pay anymore. All this put together can really work towards growing your wealth exponentially, and keeping your costs low! 

The budget also made the ‘Income Tax Appellate’ faceless (all digital) completely for Indian-origin (PIO, OCI, NRI & Expats) to benefit from, in terms of, faster and error-free filing and resolution of tax issues, online itself. This only aims at encouraging global Indian-origin to invest online in India. Note: There are no changes to existing Indian tax slabs, since the last financial year. The time period of re-opening of tax matters by the Income Tax department in India has now been reduced from 6 years to 3 years, in normal cases. Even this points to the fact that the Indian tax system is being simplified and now favors the global Indian-origin to send back investments in India, effortlessly. Indian ministries are strategically working with UAE & Japanese governments in areas of skill development of the workforce in India, in many areas.

Indian-origin people definitely have the flexibility to consult BigRise Financial™, an Investment Consulting organization that works in the space of working with Indian-origin (PIO) across the world including: OCI, NRI & Expats to get them innovative investment options in India. They bring world-class products and solutions from the world’s most renowned financial organizations and insurers to their clients.

To get COMPLIMENTARY advice on this situation, write into: nitin@bigrisefinance.com Or Drop a WhatsApp on: +91 98182 46300

Ever dreamed about a time in the Indian Tax system (IT) wherein you could save more tax on your earnings by investing for your own essential purchases? That too, by investing is some existing IT brackets that give you a bigger tax-break this financial year (FY 20-21), up and above the defined 80C (1.5 Lacs), 80D (25K for under 60 years of age), etc. section limits as laid out by the IT Department of India. It’s possible! It is Section-10 that now offers you a widened advantage.

Here’s your chance! Considering the pandemic hit economy & a bid to boost consumption and sentiments of the private employees (after the central government employees were given the benefit of this in Oct-20), the Finance Ministry has been able to income tax exemption benefits of Leave Travel Concession (LTC)/ Leave Travel Allowance (LTA) cash voucher scheme to all private employees in India.   

What do you need to do? Get to know your total LTA allowance for the 4-year block (2018-2021) from your employer, spend in equivalent of minimum 3 times of that for insurance products (ONLY with the online purchase) and then just submit the digital copies to claim the exemption as the filing of ITR happens. Note: All purchases that have 12% or above GST (Goods & Services Tax) implied on them, qualify for the highest exemptions for all spends up till 31-Mar-2021. This means all insurance products including: Life Insurance covers, base Medical covers, Mediclaim Top-ups, Accidental Riders, Temporary Disability & Total Permanent Disability, Corona Covers, etc. for you or your family are all under this. Note: You could purchase single or multiple products as well.

Example: Generally, 40K is the LTA given to you in every 2 years which means that you have to be able to spend INR 1.2 Lacs ( (i.e. INR 40K multiplied by 3) in total to get tax exemptions under this section (inclusive of GST). Note: The upper limit for claiming tax exemptions for this year is fixed at a maximum of INR 1.08 Lacs (i.e. INR 36K upper cap of LTC/ LTA multiplied by 3 times). This includes the GST spends also. If you spend lesser than 1.08 Lacs, say INR 90K, you would then qualify for reduced tax exemptions pro-rata basis of INR 30K for this year (which is INR 90K divided by 3). This literally means that basis your tax slabs (even if you are at the least @5% or highest @30%), your tax savings could be directly between 5.5% to 9.5% – which definitely become pure savings!

Further, another important advantage is that you save your leave encashment (which otherwise you would’ve lost if you took leaves to do domestic travel with your immediate family to claim LTC/ LTA). Depending on how your employer would treat this, you could encash them also – as a bonus! And let’s not forget other sundry expenditure that would’ve happened while you would have been on travel.

Technically, you may consider these savings as a ‘direct discount’ on your purchase, a ‘vital purchase’ that may have been held up at the back of your mind till now, till when this gift from the finance ministry came in. This opportunity just serves the purpose to go for that purchase now within the next week itself!

You, however, have to be wary of the fact that any existing insurance premium payments (renewals) would NOT qualify for this exemption and continue to be tax-treated as normally in 80C & 80-D exemption of yours. Interestingly, this scheme was opened to private employees in Nov-20 only, but the employers kept it under wraps will when they got certain clarifications from the CBDT department (Central Bureau of Direct Taxation) on the LTC/ LTA cash voucher scheme, which finally, have been notified now.  

If you were thinking to travel domestically and produce bills to claim exemptions internally with your employer, realistically does not seem possible in the current era of Coronavirus. Rather, you have a better alternative now to purchase the essential Life Insurance & Health Insurance (also known as ‘mediclaim’) covers and getting a much valid reason to claim exemption.
You save tax of a maximum INR 36K for this year clearly!   

If you wish to seek more clarity and know all the products that qualify in insurance under this tax extension scheme, please drop in a query to us at:

EMAIL: info@bigrisefinance.com
OR call us at: +91 96501 53331, +91 98182 46300