Moment guide · FY 2026-27

I moved to a zero-tax country but may be a deemed resident

Am I a deemed resident if I live in Dubai?

Under section 6(1A), an Indian citizen who is not a resident of any other country and earns over ₹15 lakh of Indian income can be a deemed resident, taxed on Indian income — not global income. A UAE tax residency certificate plus Form 10F shifts the analysis to the DTAA tie-breaker, but simply living in Dubai without UAE tax registration is exactly the pattern the provision targets.

The #1 trap

Thinking 'Dubai = zero tax' ends Indian taxation entirely. Section 6(1A) makes an Indian citizen who is not a tax resident anywhere else and earns over ₹15 lakh of Indian income a deemed resident, taxed on that Indian income — the provision was enacted to catch the Gulf zero-tax pattern. Without a UAE TRC or tax registration, the 'Dubai resident' claim is weak.

Vikram, engineer working in Dubai without UAE tax registration

Vikram moved to Dubai in 2024 and works for a company there, earning AED 40,000 a month, but he has never obtained a UAE tax residency certificate and is not registered with the UAE's tax authorities, because the UAE has no income tax for individuals and he saw no need. He keeps substantial Indian income: rent of ₹9,00,000 a year from a flat in Gurgaon, FD interest of ₹5,50,000 and dividends of ₹1,20,000, totalling ₹15,70,000. Under section 6(1A), an Indian citizen who is not a resident of any other country and whose total income excluding foreign income exceeds ₹15 lakh is a deemed resident, so Vikram is a deemed resident of India for tax purposes. The consequence is narrower than full residency: he is taxed on his INDIAN income of ₹15,70,000, while his Dubai salary remains outside the Indian tax net. The provision was enacted precisely for the pattern of Indian citizens in zero-tax Gulf states without tax-resident status elsewhere. If Vikram obtained a UAE TRC and registered presence, the India-UAE DTAA tie-breaker would determine his residence, and the deemed-resident provision would recede, though he would need to maintain the TRC annually and file Form 10F. If his Indian income were ₹14,00,000, the ₹15 lakh threshold would not be crossed and he would not be a deemed resident. Vikram files an Indian return as a deemed resident and reports his Indian income and the TDS already deducted on it. A quick call with us dials in the final figure. Vikram also checks the ₹15 lakh threshold against his Indian income only, excluding the Dubai salary, because the provision is triggered by Indian-source income above ₹15 lakh. If his rent, interest and dividends total ₹15,70,000, the threshold is crossed and the deemed-resident rule applies even though he lives in Dubai. If the same income were ₹14,80,000, he would remain a non-resident under the provision, though he would still file a return for the TDS credits. The deemed-resident status does not bring his Dubai salary into Indian tax, which is the key difference from full residency, and it does not require Schedule FA, because the schedule is for residents and ordinarily resident persons. If he obtains a UAE TRC and is tax-registered, the DTAA tie-breaker analysis begins, and he files Form 10F with the return. A quick call with us dials in the final figure.