INDIA → UAE

Moving your business from India to Dubai: will India still tax you?

Short answer

Moving to Dubai does not always end Indian tax residence.

India can treat a citizen as resident if Indian income is over ₹15 lakh and no other country taxes them.

By Sawan Kumar, Chartered Accountant (ICAI), Dubai. Facts checked against the linked sources on 2026-11-03.

India's day tests

You are resident if you are in India for 182 days or more in the tax year. Source
You are also resident with 60 days in the year plus 365 days in the four years before. Source
For an Indian citizen visiting India, that 60-day test is replaced. You become resident only after more than 182 days. Source
For a visiting Indian citizen with Indian income above ₹15 lakh, the 60 days is read as 120 days. Source

The deemed-residency rule

This is the rule most founders moving to the UAE miss.

It applies to an Indian citizen with total income over ₹15 lakh, not counting foreign-source income. Source
It applies if you are not liable to tax in any other country because of domicile, residence or similar criteria. Source
From tax years beginning on or after 1 April 2026, the rule is section 6(7) of the Income Tax Act, 2025. Source
For earlier years, the same rule is section 6(1A) of the Income Tax Act, 1961. Source
UAE Corporate Tax applies to individuals only if they run a business in the UAE. Source

Your UAE company can be taxed in India

India treats a foreign company as resident if its place of effective management (POEM) is in India that year. Source
POEM is where key management and commercial decisions for the business as a whole are, in substance, made. Source
The CBDT circulars say POEM does not apply to a foreign company with turnover of ₹50 crore or less. Source
So if you run your UAE company from India, check POEM before you trust the UAE rate.

The UAE side of the move

Most mainland companies can now be 100% foreign owned. Some activities of strategic importance can still carry limits. Source
UAE Corporate Tax is 0% on taxable income up to AED 375,000 and 9% above that. Source
A Qualifying Free Zone Person pays 0% on Qualifying Income. Its other taxable income is taxed at 9%. Source
Every taxable business must register for Corporate Tax, including free zone businesses. Source

Common questions

I live in Dubai. Can India still treat me as resident?

It can. Check India's day tests first. Then check the ₹15 lakh deemed-residency rule if your Indian income is high.

Which law applies in 2026?

For tax years beginning on or after 1 April 2026, residence is decided under section 6 of the Income Tax Act, 2025. Earlier years stay under the 1961 Act.

Can my UAE company be taxed in India?

Yes, if its place of effective management is in India. The CBDT circulars exclude foreign companies with turnover of ₹50 crore or less.