Can I Avoid Paying Taxes in India by Trading Forex in Dubai Without Citizenship?

Ans: Most likely, you will not have to pay taxes in India on your income earned in Dubai between May 2022 and June 2024. Here's why:

• No income tax in Dubai: The United Arab Emirates (UAE), which includes Dubai, does not levy personal income tax on its residents or even foreign nationals living there.
• India-UAE Double Taxation Avoidance Agreement (DTAA): India and UAE have a DTAA in place. This agreement prevents double taxation on the same income earned in both countries.
• NRIs and Indian taxation: Since you're working in Dubai, you're likely considered a Non-Resident Indian (NRI) for Indian tax purposes. NRIs generally don't pay Indian income tax on income earned outside India.

However, there are a few things to keep in mind:

• Indian income: This benefit applies only to your income earned in Dubai. If you have any income sources in India (rental income, investments etc.), you might need to pay taxes on those in India.
• Residential status: Your residential status for tax purposes is determined by various factors like stay duration in India. It's best to consult a tax advisor if your situation regarding residential status is unclear.

For a more definitive answer, consulting a chartered accountant or tax advisor specialising in NRI taxation is recommended. They can assess your specific situation and provide personalized advice.

Ans: Yes, your global income will be taxable in India for FY 2024–25 because of your residential status.

Let us look at this from a 360-degree perspective.

? Your Residential Status Is Key

– You said you stayed in India for around 194 days in FY 2024–25.
– That makes you a Resident and Ordinarily Resident (ROR) for income tax purposes.
– As an ROR, you are liable to pay tax in India on global income, not just Indian income.

? UAE Salary Credited in UAE Account Is Still Taxable

– Your UAE salary, even if received outside India, will be taxable in India.
– The location of the bank account does not change the tax liability.
– The source of income and your residency are what matter.
– As a resident, you must report and pay tax on this income in India.

? What If You Become NRI Next Year?

– If you stay in India less than 182 days in FY 2025–26, you’ll become an NRI.
– Then your foreign income will not be taxable in India.
– Only income earned or received in India will be taxed.

? TDS and Advance Tax Requirements

– Your employer in UAE won’t deduct TDS for India.
– But as a resident, you should calculate and pay advance tax on your UAE salary.
– If your total tax liability in India exceeds Rs 10,000, advance tax applies.
– Pay it in 4 instalments (June 15, Sept 15, Dec 15, Mar 15).

? Disclosure of Foreign Assets

– As an ROR, you must declare foreign bank accounts and other assets in your ITR.
– Use Schedule FA while filing your Indian income tax return.
– Failure to disclose can attract penalties under the Black Money Act.

? Can You Claim Relief from Double Taxation?

– India and UAE have signed a Double Taxation Avoidance Agreement (DTAA).
– But UAE has no personal income tax as of now.
– So DTAA benefits won't help you much in this case.
– However, if in future UAE introduces income tax, relief may be claimed.

? Which ITR Form to Use?

– You must file ITR-2 or ITR-3, depending on income type.
– Use ITR-2 if you are salaried and do not have business income.
– Don’t use ITR-1 (Sahaj) – it is not allowed for foreign income.

? Repatriating Money to India Is Not Taxable by Itself

– Simply transferring your UAE salary to an Indian bank account is not taxable.
– The income itself is taxable due to your resident status.
– The act of remittance is not a taxable event.

? Tax Saving Tips While You Are Resident

– Use Section 80C deductions – PPF, ELSS, children’s tuition, LIC, etc.
– Use Section 80D for medical insurance premium paid for family.
– Claim HRA if you are paying rent in UAE, though with limited benefits.
– NRE accounts are not useful while you’re a resident.

? Once You Become NRI Next Year – What Changes

– Foreign salary will become non-taxable in India.
– Only Indian income like rent, FD interest, MF redemptions will be taxable.
– You can open NRE and NRO accounts.
– Maintain proper documentation for source of income and remittances.

? Track Your Days in India Every Year

– To avoid confusion, keep a record of each day spent in India.
– Even partial days count as full days for residency calculation.
– Cross the 182-day mark, and your tax liability changes completely.

? Finally

– Since you are Resident for FY 2024–25, your UAE salary is taxable in India.
– You must report and pay tax on it while filing ITR in India.
– Plan your residency and travel dates smartly for future years.
– After becoming NRI, you can enjoy full exemption on foreign salary.
– Always disclose foreign assets and income properly in ITR.
– Consider consulting a Chartered Accountant with international tax experience.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: All 'Resident and Ordinarily Resident' must disclose all the information about their foreign assets and income in the ITR