NRI Guide for United Arab Emirates

Since the UAE has no personal income tax, UAE-based NRIs pay tax only in India on their Indian-sourced income. NRE and FCNR FD interest remains completely tax-free (exempt in India, no UAE tax). NRO FD interest is taxable in India at slab rates with 30% TDS, but the DTAA caps the withholding at 12.5% if TRC and Form 10F are provided. Dividends from Indian companies attract 20% TDS, but the DTAA rate is 10%. Capital gains on Indian assets follow domestic Indian rates (12.5% LTCG, 20% STCG for equity). The overall effect is that UAE NRIs have the lowest combined tax burden on Indian income among any NRI group. The UAE Corporate Tax (9% on business profits above AED 375,000) introduced in 2023 does not apply to personal income, employment earnings, or individual investment returns.

The UAE-India remittance corridor is the largest in the world, with over $20 billion in annual flows. NRE accounts are the primary vehicle, funded by UAE salary credits (WPS income qualifies as foreign earnings). Most Indian banks with UAE branches (SBI, BoB, IndusInd, ICICI) offer seamless NRE funding. Exchange houses (UAE Exchange, Al Ansari, Lulu Exchange) provide competitive rates for smaller transfers. For NRO repatriation, the USD 1 million cap and Form 15CA/15CB apply as standard. Some UAE banks offer automatic sweep facilities from UAE accounts to NRE FDs for maximum interest optimisation.