DUBAI: With a key tax deadline fast approaching, Indian nationals residing in the UAE are being reminded of the importance of filing their ITRs on time—especially with new tax rates set to take effect from July 23, 2024.

Dixit Jain, Managing Director at The Tax Experts DMCC in Dubai, explained that not only does it help avoid penalties and ensures NRIs don’t miss out on valuable tax refunds.

Effective July 23, long-term capital gains tax (for holdings over 12 months) has risen from 10% to 12.5%, while short-term capital gains tax (under 12 months) has gone up from 15% to 20%. This change directly impacts NRI investors dealing in stocks, mutual funds, or real estate.

To ensure accurate filing, expats should prepare essential documents including bank statements (NRO/NRE), interest certificates, rent receipts, investment proofs under Sections 80C and 80D, PAN, Aadhaar, Emirates ID, and records of time spent in India.

A common misconception is that tax deducted at source (TDS) eliminates the need to file returns. Jain clarifies that filing is the only way to claim refunds, carry forward capital losses, and avoid legal complications.

Surveys indicate that nearly 90% of NRIs who had TDS deducted but failed to file returns missed out on potential refunds—sometimes worth thousands of dirhams.

Taxable sources include salary earned in India, rental income, interest on NRO accounts and FDs, and capital gains from property or stocks. Notably, interest on NRE and FCNR deposits remains tax-exempt.

Beyond avoiding penalties up to ₹5,000, timely ITR filing enables NRIs to claim refunds, carry forward losses, and build income proof for visa or loan applications. Those with income over INR250,000 must file a return, while those earning over INR5 million must also declare assets and liabilities in India.