NRIs living in the UAE can benefit from the country’s zero-tax regime and India’s tax treaties to minimize their overall income tax burden.
The UAE does not levy personal income tax on its residents, including foreign nationals, making incomes tax-free locally, with the added benefit of the India-UAE DTAA preventing double taxation.
NRIs are taxable in India for income generated there, and recent amendments have tightened the criteria to retain NRI status, requiring spending fewer than 182 days in India during a financial year and compliance with FEMA guidelines.
Some NRIs utilize capital gains exemptions and loopholes, like shifting tax residency to UAE to avoid capital gains taxes in India, and they leverage NRE and NRO accounts for managing foreign and Indian income, respectively.