UAE-based NRIs & Tax-Free Returns

NRIs based in the UAE can benefit from tax-free returns on mutual funds. Profits/gains can be redeemed without incurring taxes.

If an individual holds a UAE Residence Visa and does not maintain an official place of residence outside the UAE then all income in the UAE (place of residence)  is completely tax-free, This includes income generated through investing in Indian Mutual Funds.

Tax Exemption for UAE-Based NRIs (on mutual funds)

The tax exemption for UAE-based NRIs (on mutual funds) can be attributed to two key reasons

• The UAE is a tax-free country, where residents are not required to pay taxes on any form of income.
• The Double Taxation Avoidance Agreement (DTAA) between the Indian and UAE governments ensures that NRIs are not obligated to file taxes in both countries, providing further tax relief.

UAE-based NRIs can file their Income Tax Returns (ITR) in the UAE, resulting in tax-free returns on mutual funds.

The investment from UAE-based NRIs in India has been steadily increasing since the signing of the DTAA.

A survey suggests that 30% are looking for long-term investment plans, 26% want to invest in retirement plans, and 15% want to invest in government-backed infrastructure funds. (source: Righthorizons )

A survey titled ‘The NRIs’ Investment Inflows into India – A Pulse Study’ stated that UAE-based NRIs are expected to increase their investment inflows into India after the upcoming general elections.

Read More: Why NRIs enjoy tax benefits on mutual funds investments

Investors may contact MutualFundWala to seek assistance with NRI investment strategy.