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NRIs based in the UAE can benefit from tax-free returns on mutual funds. Profits/gains can be redeemed without incurring taxes. MutualFundWala aids investors in achieving tax-free returns.
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
1. The UAE is a tax-free country, where residents are not required to pay taxes on any form of income.
2. 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.
| Top Mutual funds that can be considered for investing | 3years return (CAGR) |
| SBI Contra Fund (G) | 30.38% |
| SBI PSU Fund (G) | 40.8% |
| ICICI Prudential Infrastructure Fund (G) | 39.3% |
| Invesco India PSU Equity Fund (G) | 37.7% |
Read More: Why NRIs enjoy tax benefits on mutual funds investments
Investors may contact MutualFundWala to seek assistance with NRI investment strategy.
