A non-resident entity (other than a citizen of Pakistan or an entity incorporated in Pakistan) can invest in India, subject to the Foreign Direct Investment (FDI) policy. A citizen of Bangladesh or an entity incorporated in Bangladesh can invest in India under the FDI policy, only under the Government route.
NRIs resident in Nepal and Bhutan as well as citizens of Nepal and Bhutan are permitted to invest in the capital of Indian companies on repatriation basis, subject to the condition that the amount of consideration for such investment shall be paid only by way of inward remittance in free foreign exchange through normal banking channels.
As per the policy, Foreign Direct Investment (FDI) by non-resident in resident entities through transfer or issue of security to a person resident outside India in insurance sector is as follows:
- FDI upto 26% is allowed under the automatic route.
- This will be subject to the condition that Companies bringing in FDI shall obtain necessary license from the Insurance regulatory Development Authority (IRDA) for undertaking insurance activities.
A person desiring to obtain a licence (hereinafter referred to as "the applicant") from Insurance Regulatory Development Authority to act as a corporate agent or a composite corporate agent shall proceed as follows:
- The applicant shall make an application to a designated person in Form IRDA-Corporate Agents-A-1. (Provided that the applicant, who desires to be a composite corporate agent, shall make two such separate applications)
- The fees payable by the applicant to the Authority shall be Rupees Two Hundred and Fifty only.
- The designated person may, on receipt of the application along with the evidence of payment of fees to the Authority, and on being satisfied that the corporate insurance executive of the applicant:-
- possesses the prescribed qualifications;
- possesses the prescribed practical training;
- has passed the prescribed examination;
- has furnished an application complete in all respects;
- has the requisite knowledge to solicit and procure insurance business; and
- is capable of providing the necessary service to the policyholders;
Grant or renew, as the case may be, a licence in Form IRDA-Corporate Agents-L-1
- Every licence granted by the Authority to a corporate agent or any renewal thereof, in terms of these regulations, shall remain in force for three years.
A licence granted to a corporate agent may be renewed for a further period of three years on submission of the application form along-with a renewal fee of rupees two hundred and fifty, at least thirty days prior to the date of expiry of the licence.
Income Tax Deduction in respect of certain payments
Any sum paid by an individual on Life Insurance Policy for himself/herself, spouse and any child of such individual is entitled for income tax deduction from his gross total income upto the amount paid to an extent of Rs 1,00,000.
Any sum paid by an individual to keep in force insurance on the health of the assesse or his spouse and dependent children is entitled for income tax deduction from his gross total income
upto the amount paid to an extent of Rs 15,000. If any person is a senior citizen (who is of the age of 65 years or more) then additional deduction of Rs 5,000.00 will be allowed.
Any sum paid by an individual to keep in force insurance on the health of his parents whether dependent or not is entitled for income tax deduction from his gross total income upto the amount paid to an extent of Rs 15,000. If any person is a senior citizen (who is of the age of 65 years or more) then additional deduction of Rs 5,000.00 will be allowed.
By Anupama Aggarwal
Partner, Peeyush Aggarwal & Co. Consultancy Pvt Ltd