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Taxing and reporting of Foreign Life insurance ULIP policy of tax return
Hello,
I am US citizen & file married filing jointly. I opened a Foreign Life insurance policy (ULIP) by Bajaj Allianz in India this year (2024) for 5-year premium payment terms and total 10-year policy maturity. I have some questions that I need to clarify before 2024 US tax return is coming due in new year.
1- I paid one year premium in April. So, in the coming 2024 tax return next year, what do I need to declare on my return?
2- Is premium deductible and what proof do I need in order to claim deduction?
3- For tax return 2024, what information would I need to collect from the Insurance company for reporting purposes?
4- The policy is also an investment, and the total policy amount has so far increased by 10%. Even though the policy will mature in 10 years, do I need to report this increase of 10% in the account value on my 2024 tax return and pay taxes? I will not receive any money until the policy matures.
5- For a question for long term- When policy matures, Indian government may collect taxes from me on any investment profits in Policy amount. Do I have to also pay taxes in US then? I have heard there is a treaty between India & US to avoid double taxation for a situation like this. Any help and clarification would be really appreciated.
6- If I don't have to pay any tax on investment profits until policy matures in 10 years, but what information should I still collect NOW in 2024 that I might need to report on my 2024 tax return in US?
Thanks in advance,
Nalin M
[email address removed]