Moving to Dubai: How to Correctly Become Non-Resident for Indian Tax

Thousands of Indians move to the UAE every year for jobs or to start businesses. The UAE does not tax salaries, but India may still tax you if you do not actually become non-resident under Indian law, or if you leave your Indian finances unchanged. Here is a practical checklist.

Step 1: Understand when you become an NRI for tax

Your status is worked out for each tax year (April to March) based on days in India. The tests are covered in detail in our article on residential status:

Leaving India for employment abroad: in the year you leave, you are resident only if you are in India for 182 days or more. The usual 60-day test does not apply to you.
Leaving for business, or as a self-employed person: this employment relaxation may not apply. Leaving to run your own business abroad has been treated differently in some cases, so the 60 + 365-day test may still apply in your year of departure. Get advice.
In later years, as a visitor to India: if your Indian income is ₹15 lakh or less, you are resident only if you spend 182 days or more in India. If it is above ₹15 lakh, the limit can drop to 120 days (with 365 days over the previous four years).
Deemed residency: an Indian citizen with Indian income above ₹15 lakh who is not liable to tax anywhere else can be treated as resident (RNOR). The government has said that genuine workers abroad are not taxed in India on their foreign earnings.

Example: Priya moves to Dubai on 10 August 2026 for a job. Counting from 1 April, she was in India for 132 days in tax year 2026-27, which is fewer than 182 days, so she is a non-resident for 2026-27. Her Dubai salary is not taxable in India.

Step 2: Your Indian income after you move

As an NRI you are taxed in India only on Indian income:

Rent from Indian property: the tenant deducts TDS.
NRO interest: taxable, with TDS at about 31.2%. A lower rate can apply under the India–UAE treaty if you provide a UAE Tax Residency Certificate.
Capital gains on Indian shares, mutual funds and property: TDS is deducted when you sell or redeem.
Salary for days worked in India before you left: taxable in India.

Note: NRIs cannot use the rebate that makes income up to ₹12 lakh tax-free. That rebate is only for residents.

Step 3: Bank accounts and investments

Item	Action
Savings accounts	Redesignate as NRO accounts. FEMA requires this
New account for UAE earnings	Open an NRE account. Interest is tax-free in India
Fixed deposits	Convert to NRO deposits
Mutual funds and demat	Update your status to NRI with the fund houses and your broker. Link an NRE or NRO bank account
Shares bought on the exchange	Get a PIS permission from your bank to buy and sell as an NRI
PPF, NPS, insurance	Tell the institution. Rules for continuing as an NRI vary by product, so check each one
PAN and Aadhaar	Keep your PAN active. Update your residential status and address with the tax department and your banks

Step 4: Indian tax filing in the year you move

File your ITR for the year you leave, showing your correct residential status. If you became non-resident, foreign salary is excluded.
If TDS was deducted on your Indian salary for the full year, you may be due a refund.
Your employer in India may have assumed you would stay resident. Check Form 16 (now Form 130) carefully.

Step 5: UAE side

Get your Emirates ID and residence visa. Keep your lease and employment documents.
Once you meet the UAE conditions (generally 183 days in the UAE, or 90 days plus residence and a permanent home or job), apply for a UAE Tax Residency Certificate through the FTA’s EmaraTax portal. You need it to claim treaty benefits in India.

Common mistakes

Assuming you became NRI on the day you landed. Status is decided for the whole tax year.
Continuing to use a resident savings account as an NRI.
Ignoring Indian income above ₹15 lakh, which can trigger the 120-day rule or deemed residency.
Running a business from India through a UAE company while still spending most of your time in India. See our article on POEM.
Not keeping travel records. Passport stamps and boarding passes are your evidence.

Frequently asked questions

Is my Dubai salary taxable in India?
Not if you are a non-resident for the year. If you are resident (for example in the year you leave, if you were in India for 182 days or more), your worldwide income, including UAE salary, is taxable in India.

Do I need to file an ITR in India after moving?
Only if your Indian income is above the basic exemption limit, or you want a refund, or you have capital gains that are not fully covered by TDS. See our NRI ITR article.

Can I keep my Indian credit cards and loans?
Generally yes, but tell the lender you are now an NRI. Repayments should come from NRE or NRO accounts.

Moving abroad? Garvita Jain & Co. plans the move for Indians relocating overseas, covering residential status, bank account conversion, refunds and your first ITR as an NRI. Contact us here, or at contact@garvitajainandco.com or +91 98678 16597.

This article is general information based on the law as of October 2026 and is not professional advice.

Sources

Official

Professional / CA publications