NRIs in the UAE: understanding the India–UAE DTAA for mutual fund gains

What the India–UAE DTAA says

Under the India–UAE DTAA, capital gains made by a UAE tax resident from the sale of Indian mutual funds may, subject to eligibility and the treaty terms in force, be taxable only in the UAE. As the UAE does not currently levy personal income tax, an eligible person may end up with no Indian tax on such gains. Tax laws and treaty interpretation can change, so please confirm the current position with a qualified tax professional.

Documentation commonly involved in claiming treaty benefit

Step 1: Check Your Eligibility

You qualify if:

• You’re an NRI (i.e., you stayed outside India for more than 182 days in the financial year).
• You’re a UAE tax resident during the relevant financial year.

Step 2: Get a UAE Tax Residency Certificate (TRC)

This is essential to claim DTAA benefits.

How to apply:

• Visit the UAE’s Ministry of Finance online platform.
• Register on EmaraTax.
• Upload documents like passport, Emirates ID, visa, 6-month bank statement, and proof of Indian income.
• Pay the application fee (AED 50 + AED 500).
• TRC is usually issued in 5–10 working days.

Step 3: Fill Form 10F

This form is available on India’s Income Tax portal. It includes:

• Your full name, nationality, and UAE tax residency.
• Confirmation that you don’t have a permanent establishment in India.

Step 4: Draft a Self-Declaration

Prepare a letter confirming:

• You are a UAE resident.
• You do not have a base or operations in India.
• You are claiming DTAA benefit on capital gains.

Step 5: Submit the Documents

Send your TRC , Form 10F , and self-declaration to your mutual fund company or their registrar (like CAMS or KFintech).

This will help:

• Avoid tax deduction at source (TDS), or
• Make it easy to claim a refund later.

What if TDS Was Already Deducted?

If TDS has already been deducted, you may be able to:

• File your Indian Income Tax Return (ITR).
• Claim a refund of the excess TDS, if eligible.
• Attach your TRC and other supporting documents.

Filing an ITR Is Still Recommended

Even where no tax is finally payable, filing your ITR-2 is:

• Mandatory if TDS was deducted.
• Useful for high-value investments.
• A good way to maintain a clean record with Indian tax authorities.

Final Checklist for UAE-Based NRIs

• ✅ TRC from UAE Ministry of Finance
• ✅ Form 10F on Indian IT portal
• ✅ Self-declaration letter
• ✅ Submit documents to AMC/registrar
• ✅ File ITR-2 and claim any refund or relief you are eligible for

For tax questions, please consult a qualified tax professional. For mutual fund investment servicing, you can contact us.

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*Shared by Kanethic Private Limited, an AMFI Registered Mutual Fund Distributor (ARN-254247), for investor education only. It is general information, not personal investment or tax advice, and no outcome is guaranteed. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.*