What every NRI should know about Indian tax returns – the documents you’ll need, common mistakes to avoid
Dubai: Indians living in the UAE have a deadline to meet – the Income Tax Returns (ITR) filings for the financial year 2025-2026 are due on July 31, and if you have still not filed your returns, here is all you need to know about who is required to file returns and what happens if you miss the deadline.
Do I need to file an ITR?
According to Dixit Jain, CEO and Managing Director of The Tax Experts DMCC, many NRIs living in Dubai might assume that as they only have income in the NRE (Non-resident External) accounts, they do not need to file an ITR.
“However, over time, many also start investing their NRE savings in mutual funds, shares or other assets in India. When these investments generate capital gains or other taxable income, or when tax is deducted at source (TDS) on such income, they may be required to file an income tax return. Filing also enables them to claim refunds of excess TDS and avail themselves of benefits under the India-UAE Double Taxation Avoidance Agreement,” he said.
Dixit Jain
Also, even if your taxable income is below the basic exemption limit of INR 4 lakh, you may still be required to file an Income Tax Return if you meet certain specified conditions under the Income-tax Act. This includes:
Deposits exceeding ₹1 crore in one or more current accounts.Foreign travel expenses exceeding ₹2 lakh during the financial year.Electricity bills exceeding ₹1 lakh during the financial year.TDS/TCS of ₹25,000 or more during the year (₹50,000 for senior citizens).Business turnover exceeding ₹60 lakh or professional receipts exceeding ₹10 lakh.Other situations specified under the Income-tax Act.
How do NRIs file an income tax return?
Before you begin the tax return filing process, make sure you have the digital copies of the following documents ready:
Details of income earned in IndiaCapital gains statements, if applicableTax Deducted at Source (TDS) certificatesTax Residency Certificate (TRC), if claiming benefits under the India-UAE Double Taxation Avoidance Agreement (DTAA)
Once you have these documents, you can file your return online through India’s Income Tax Department portal – https://www.incometax.gov.in
After logging in with your PAN (or Aadhaar, where applicable), select the relevant assessment year, choose the applicable ITR form, fill in your income details, verify the information and submit the return electronically.
Dos and don’ts to keep in mind
1. Do check whether you actually need to file an ITR – As mentioned earlier, it is important that you not assume you have no filing obligation in India, because you are earning your salary in the UAE. If you have income or investments in India, filing may still be mandatory.
2. Check for benefits from the India-UAE tax agreement – The India-UAE Double Taxation Avoidance Agreement (DTAA), which has been in place since the early 90s, helps prevent the same income from being taxed twice. However, these benefits are available only if you file your return and claim them correctly.
3. Apply for the Tax Residency Certificate (TRC) – According to Jain, the TRC is one of the most important documents for NRIs, as it proves that you are a tax resident of the UAE and allows you to claim benefits under the India-UAE tax treaty. You can apply for the TRC through the UAE’s EmaraTax portal – https://tax.gov.ae/en/services/issuance.of.tax.certificates.aspx. All you need to do is sign in with your UAE PASS and click on the ‘Tax Residency Certificate’ service. Upload the required documents and submit the request.
The certificate is typically issued within five business days, according to the Federal Tax Authority.
4. Don’t ignore TDS deductions – If you have dividend income or income on your NRO (Non-Resident Ordinary) account, or other sources of income, which had the tax deducted at source, filing an ITR could allow you to claim refunds or lower tax liability where applicable.
According to Jain, under the India-UAE DTAA agreement, certain dividend income may be taxed at 10 per cent instead of higher domestic rates, provided the required documentation, including the TRC, is submitted.
Left your ITR filing till the last week? Here’s what you should do
If you have delayed filing your return, Jain recommended acting immediately rather than waiting for every document.
“If you have most of the data in place, just file the returns and you can revise the data at a later date as well,” he said.
But if you are still unable to file by July 31, you can still submit a belated return, according to Jain, which can be done until December 31, 2026.
However, missing the deadline has financial consequences, including a late filing fee of INR 5,000 (if your taxable income is above ₹5 lakh) or INR1,000, if your taxable income is below the threshold.
“Also, interest may be charged on any unpaid tax liability until the return is filed,” Jain said.
“If you file your return after the due date, there are certain losses you will have to bear. For instance, if you’ve made losses on the sale of mutual funds, shares or property, you won’t be able to carry those losses forward and set them off on your tax liability,” he added.
