NRI status when you move to Dubai: residence days, RNOR and your bank accounts

Your residence is counted per tax year (and the new Income-tax Act)

India's Income-tax Act 2025 replaced the Income-tax Act 1961 on 1 April 2026. Parliament passed it on 12 August 2025, the President gave assent on 21 August 2025, and the Income-tax Rules 2026 were notified on 20 March 2026 (CBDT press release (opens in a new window)).

The new Act talks about a “tax year”: the financial year starting on 1 April (section 3(1) (opens in a new window)). It replaces the old “previous year” and “assessment year”. The new Act applies to tax years starting on or after 1 April 2026; earlier years stay under the 1961 Act, so a return for 2025-26 still uses the old section numbers.

Your residence is decided for each tax year on its own, so you can be resident one year and non-resident the next. The rules are still in section 6, and the Income Tax Department says the basic conditions haven't changed: only the section numbers have. Many articles still quote the 1961 numbers, so this guide gives both.

This guide is guidance, not tax advice. Your days, income and family decide the answer, so check with the Income Tax Department (opens in a new window) or a chartered accountant for your case. For the rest of the move, read moving to Dubai from India.

The day test when you leave India for a job abroad

Normally you're resident in India for a tax year if you're there for 182 days or more (section 6(2)(a), was 6(1)(a)), or for 60 days in the year plus 365 days over the 4 years before it (section 6(2)(b), was 6(1)(c)).

The second test doesn't apply to an Indian citizen who leaves India for a job abroad (section 6(3)(b), was Explanation 1(a)). So in the year you leave, only one number counts: spend fewer than 182 days in India that tax year and you're non-resident for it.

• Count your days from 1 April. Leave in the first half of the tax year and you're usually non-resident for the year you go. Leave later and that year probably counts as resident, with your non-resident years starting on the next 1 April.
• Keep your offer letter, UAE employment visa and passport stamps: they show you left for a job, and when.
• If your family stays in India for a while, the test is still about your own days, not theirs.

The Act's own text is on the Income Tax Department's section 6 page (opens in a new window), and the 1961 version (opens in a new window) is still online for earlier years.

Visiting India after you move

Once you live in Dubai you're a citizen visiting India, and the 60-day test doesn't apply to you either (section 6(4)). You stay non-resident as long as you spend fewer than 182 days in India in a tax year.

The exception is a high Indian income. If your income from India, not counting foreign income, is over ₹15 lakh in the tax year, the 60 days become 120 (section 6(5), since the Finance Act 2020). Then 120 days in India in the year, plus 365 days over the previous 4 years, make you resident, though only as RNOR (see the last section). Rent, interest and gains in India count towards that income.

Deemed residence and Gulf workers

An Indian citizen who isn't liable to tax in any other country, and whose Indian income is over ₹15 lakh, is treated as resident in India (section 6(7), was 6(1A)). The UAE has no income tax, so when the rule came in, many Gulf workers worried it was aimed at them.

On 2 February 2020 the CBDT said it isn't: the rule isn't meant to tax bona fide Indian workers abroad, “including in Middle East”, and income earned outside India isn't taxed unless it comes from an Indian business or profession (the press release (opens in a new window)).

A deemed resident also counts as RNOR (section 6(13)(c)), so your Dubai salary stays out of Indian tax either way. The rule only matters if your Indian income is high; if yours is close to the line, talk to an adviser.

What an NRI pays tax on in India, and filing a return

As a non-resident you're taxed in India only on income received, accrued or deemed to arise in India (section 5 (opens in a new window)). Your Dubai salary, earned and paid outside India, isn't part of it. What usually is: rent from a flat in India, interest on NRO deposits, and gains on Indian shares, funds or property.

Interest on NRE deposits stays tax-free. It was section 10(4)(ii); in the new Act it's section 11 with Schedule IV. The Income Tax Department's FAQ adds that the exemption depends on your residence under FEMA, the foreign exchange law, not your tax residence.

Banks take tax off NRO interest at source: 30% before surcharge and cess, according to ICICI Bank's guide. There's no TDS on NRE deposits.

File a return if your Indian income is over the basic exemption: ₹4 lakh under the new regime and ₹2.5 lakh under the old one, for 2025-26. Those figures are from ClearTax: we couldn't confirm the 2026-27 amounts on an official page. Non-residents can't claim the section 87A rebate. A return is also how you get back TDS that was more than the tax you owe.

Your bank accounts: NRO, NRE and FCNR

Tell your bank when you move. Under RBI rules, once you become a person resident outside India your resident savings account must be redesignated as an NRO account. FEMA, not the tax law, decides that. It counts you as resident if you were in India for more than 182 days in the previous financial year, but not once you've left India for a job abroad: you change status when you go, without waiting for a day count. (That's Taxmann's summary of FEMA; the RBI's FAQ (opens in a new window) has the account rules.)

1. 1

   NRO (non-resident ordinary)

   For income you earn in India, such as rent or dividends. Interest is taxable. You can send up to $1,000,000 (US dollars) a financial year abroad from NRO balances.
2. 2

   NRE (non-resident external)

   For money you bring in from abroad, such as your Dubai salary. It's repatriable and the interest is tax-free. The RBI's FAQ gives fixed deposit terms of 1 to 3 years.
3. 3

   FCNR(B)

   A fixed deposit kept in a foreign currency instead of rupees. Repatriable, interest tax-free, for 1 to 5 years.

When you come back for good, an NRE account becomes a resident or RFC (resident foreign currency) account at once; an FCNR(B) deposit may run to maturity. For the Dubai side, see opening a bank account in Dubai.

PAN, Aadhaar and your PPF

Keep your PAN: you need it for your return, your NRO account and your investments. Non-residents don't have to link PAN and Aadhaar (Notification 37 of 2017). If your PAN has become inoperative, the fee to make it operative again is ₹1,000. See the e-filing portal's Aadhaar linking FAQ (opens in a new window).

You can't open a PPF account as an NRI. One you opened while resident runs to maturity, but you can't extend it. PPF accounts extended irregularly by NRIs earn 0% interest from 1 October 2024. That's from Upstox's report, not an official page, and sources differ on the date (some say 12 July 2024), so check with your post office or bank.

The India–UAE tax treaty and the UAE tax residency certificate

India and the UAE have a double taxation avoidance agreement, in force since 22 September 1993. It matters if both countries could treat you as resident in a year, such as the year you leave. For the treaty, you're resident in the UAE if you're there for 183 days in the calendar year (Article 4(1)(b)). If you'd still be resident in both, the tie-breaker looks at your permanent home, then your centre of vital interests, then your habitual abode, and finally your nationality (Article 4(3)). Read the agreement (opens in a new window).

The treaty also caps Indian tax on interest paid to a UAE resident at 12.5% (Article 11(2)(b)), below the 30% banks take off NRO interest. To claim it you need proof of your UAE residence.

That proof is a tax residency certificate from the UAE's Federal Tax Authority. It uses the UAE's own rule, not the treaty's: 183 days in any 12-month period, or 90 days with a residence permit and a home or a job in the UAE (Cabinet Decision 85 of 2022). The certificate costs AED 500 (≈ ₹13,000) (electronic), plus an AED 50 submission fee and AED 250 per printed copy, and takes about 10 business days once your application is complete. Apply on the FTA's site (opens in a new window).

Coming back: RNOR

When you return for good, you may not go straight back to being fully resident. For a while you can be “resident but not ordinarily resident” (RNOR): your Indian income is taxed as normal, but income earned outside India isn't, unless it comes from an Indian business or profession. You're RNOR for a tax year if any of these applies:

• You were non-resident in 9 of the 10 previous tax years (section 6(13)(a)(i), was 6(6)(a)).
• You were in India for 729 days or less in total over the 7 previous tax years (section 6(13)(a)(ii)).
• You're a visitor with Indian income over ₹15 lakh who spent 120 to 181 days in India in the year (section 6(13)(b)).
• You're a deemed resident (section 6(13)(c)).

Work through the tests with your own years before you book the flight home. After a short stay abroad you may not qualify at all, because the years you spent in India before you left still count. Your bank accounts change the day you return, and an adviser can help you time the move. To see whether Dubai pays enough to be worth the years away, compare salaries and the cost of living, or take the free check.

Sources

1. Income tax for NRIs (opens in a new window), ClearTax (secondary), 29 September 2026
2. Income-tax Act 2025, section 3: tax year (opens in a new window), Income Tax Department, 29 September 2026
3. Income deemed to accrue or arise in India (opens in a new window), Income Tax Department, 29 September 2026
4. Income-tax Act 2025, section 6: residence in India (opens in a new window), Income Tax Department, 29 September 2026
5. Are NRIs required to close their PPF account before 15 years? (opens in a new window), Upstox (secondary), 25 July 2025
6. FAQs: accounts by residents and non-residents (opens in a new window), Reserve Bank of India, 16 January 2025
7. Issuance of tax certificates (tax residency certificate) (opens in a new window), UAE Federal Tax Authority, 29 September 2026
8. Person resident in India under FEMA (opens in a new window), Taxmann (secondary), 29 September 2026
9. Link Aadhaar: FAQs (opens in a new window), Income Tax Department, 29 September 2026
10. India–UAE comprehensive agreement (DTAA) (opens in a new window), Income Tax Department, 29 September 2026
11. New TDS guidelines for NRIs (opens in a new window), ICICI Bank (secondary), 29 September 2026
12. Following Cabinet Decision No. 85 of 2022 on tax residency (opens in a new window), UAE Ministry of Finance, 2 March 2023
13. Non-resident: e-filing help and FAQs (opens in a new window), Income Tax Department, 29 September 2026
14. Income-tax Act 1961, section 6: residence in India (opens in a new window), Income Tax Department, 29 September 2026
15. CBDT clarification on the new provision on deemed residence (opens in a new window), Ministry of Finance (copy of the press release), 2 February 2020
16. Income-tax Act, 2025 comes into force from 1 April 2026 (press release) (opens in a new window), CBDT, 1 April 2026
17. United Arab Emirates: residence (opens in a new window), PwC Worldwide Tax Summaries, 9 September 2026