Becoming a Non Resident in India NRI: Your Complete Guide for Indians Moving to Dubai in 2026
If you're thinking of making the move from India to Dubai in 2026, the very first question you need to ask yourself is: what does it mean to officially be a Non Resident in India - and how does it affect my tax situation?
Loads of Indians focus on getting the right visas, jobs, and business setup in the UAE, but overlook the NRI tax implications in India. Trust us, that oversight can cost you later down the line.
This guide lays it all out in plain English, including the new rules for being a Non Resident in India, the number of days you can stay in India without running into tax trouble, whether you need to file an ITR if you've got no income in India, and what happens if you get your NRI status completely wrong.
If you're relocating to Dubai for work or business, make sure to read this carefully before you make your move.
What's the Deal with Being a Non Resident for Income Tax?
Becoming an NRI isn't just about holding a different passport - it's about your residential status under the Indian Income Tax Act.
Your status is determined purely based on how many days you spend in India over the financial year.
You'll be considered a Non Resident for income tax if:
- You're in India for 182 days or less during that financial year
- You meet certain conditions set out in the Indian tax law
But here's the thing: just moving to Dubai doesn't automatically make you an NRI - it's all about how many days you spend in India.
New Rules for NRI in India 2026
Over the last few years, the Indian government has introduced some big changes to the way they determine residential status, and it affects being a Non Resident in India.
The new rules for NRI in India include:
- Stricter rules on calculating the number of days you spend in India if you've got high income
- Deemed residency provisions in certain cases
- Changes to the rules for Resident but Not Ordinarily Resident status
If you've got an income in India that exceeds certain limits, the number of days you can spend in India without being considered a resident could drop from 182 to 120 days - so if you're flying back and forth between India and Dubai, you need to keep track of your time spent in India.
How Many Days Can an NRI Spend in India Without Tax Trouble?
This is one of the most frequently asked questions: how many days can an NRI spend in India without running into tax trouble?
The basic rule is:
- If you spend 182 days or more in India during a financial year, you might be considered a resident
- If you spend less than 182 days, you might qualify as a Non Resident
But it gets more complicated if you look at the cumulative conditions based on previous years.
If you're making the move to Dubai for good, your aim should be to make sure you don't spend too much time in India and get caught out with the wrong status.
And remember to calculate your days from April 1 to March 31 - not from the calendar year.
What's Resident but Not Ordinarily Resident?
When you're making the move to Dubai, you might find yourself in a situation where you're considered Resident but Not Ordinarily Resident.
This is a transitional status that usually applies to Indians who are returning home or have recently changed their residency.
Resident but Not Ordinarily Resident means:
- You're technically considered a resident in India
- But your global income might not be fully taxable in India
This status is usually a temporary one, but if you're moving to Dubai in 2026, your first year needs careful planning to avoid any unintended tax headaches.
NRI Tax in India After You've Moved to Dubai
Once you're officially an NRI, your tax situation changes in a big way.
As an NRI:
- Only income earned or received in India is taxable
- Foreign income earned in Dubai is generally not taxable in India
Let's take some examples:
- Rental income from an Indian property is taxable
- Interest from an Indian savings account is taxable
- But salary earned in Dubai is not taxable in India
Getting to grips with NRI tax in India ensures you don't pay more tax than you need to.
Do I Need to File an ITR if I've Got No Income in India?
Lots of people ask: do I need to file an ITR if I've got no income in India?
If you've got:
- No taxable income in India
- No capital gains
- No property income
- No bank interest above the exemption limit
Then in general, you might not need to file an ITR.
But if:
- TDS has been deducted
- You want to claim a refund
- You've got financial investments
You might still want to file one - it's always better to be safe than sorry and review your financial situation.
Which ITR Form Do NRIs with Only Interest Income in India File?
If you're an NRI and only earning bank interest income in India, you'll likely need to file:
- ITR 2
The ITR form you need to file as an NRI with only interest income will depend on factors like:
- Do you have capital gains?
- Do you have business income?
- Do you have property income?
Most NRIs earning passive income like bank interest use ITR 2.
What's the Penalty for Not Declaring NRI Status Correctly?
Getting your NRI status wrong can lead to some serious consequences.
If you:
- Incorrectly file as a resident
- Hide foreign income
- Misreport your residential status
You could face:
- Tax demand notices
- Interest and Penalties
- Scrutiny Proceedings
When you make the move to Dubai, make sure you update:
- Bank accounts to NRO or NRE
- PAN records
- Financial declarations
Getting the classification wrong can lead to a whole heap of problems down the line.
Steps to Become an NRI When Moving to Dubai
If you're thinking of relocating from India to Dubai, here's what you need to do:
Step 1: Plan Your Travel
Try to make sure you don't overstay your welcome in India and end up over a certain threshold.
Step 2: Secure Dubai Residency
Get yourself:
- An employment visa
- An investor visa
- A business license if you're starting a company
Step 3: Convert Bank Accounts
Switch your resident savings account over to:
- A NRO account
- An NRE account
Step 4: Review Your Investments
Get your KYC status sorted in:
- Your mutual funds
- Your demat accounts
- Your insurance policies
Step 5: Keep Track of Your Income Sources
Make sure you keep separate accounts for:
- Your Indian income
- Your Dubai income
And all this organisation will help prevent any tax disputes down the line.
Why So Many Indians Are Moving to Dubai in 2026
Dubai has a lot to offer:
- No personal income tax
- A strong business environment
- A stable regulatory framework
- A great global location
But if you're planning on starting a business or job in Dubai, don't make the mistake of ignoring your Indian tax situation - that could undo all the benefits you've got in Dubai.
You've got to get your relocation sorted out on both sides, legally.
Common Mistakes Indians Make When Moving to Dubai
- Not keeping track of the number of days you spend in India
- Not closing down your resident savings accounts
- Not converting to NRO or NRE
- Ignoring the double taxation agreement
- Not fully understanding what it means to be Resident But Not Ordinarily Resident
If you avoid making these mistakes, your move to Dubai will be a lot smoother.
How Flyingcolour® Business Setup Can Help You Move to Dubai
Flyingcolour® Business Setup is here to help Indian professionals and entrepreneurs planning to relocate to Dubai with:
- Business setup guidance
- Company formation support
- Investor visa assistance
- Employment visa coordination
- Structuring advice that's all about keeping on the right side of UAE regulations
And while your residential tax classification in India is governed by Indian law, getting the right UAE residency documents in place is crucial for getting your non-resident status right.
Placing a bit of thought and planning into your move will cut down on compliance risk.
Final Thoughts
Becoming an NRI in terms of income tax is not just a matter of moving to Dubai.
You need to:
- Get your day count right
- Get your visa paperwork sorted
- Get your bank accounts sorted
- Make sure your tax compliance is all on track
If you're planning on moving from India to Dubai in 2026, you need to put in some serious planning around your residential status.
The difference between being a resident and an NRI can make a huge difference to your tax bill in India.
Dubai may offer you great opportunities but only if you've got your tax affairs in order will you be able to keep your earnings.
Frequently Asked Questions
What are the new rules for NRI in India in 2026?
The rules centre around the number of days you spend in India and the amount of income you've got. If you're earning a lot, you might find you're allowed to stay for a lot fewer days.
How many days can an NRI spend in India before they become resident?
Generally, it's less than 182 days in a year, but that depends on a whole load of factors as well.
Do NRIs need to file an ITR if they don't have any income in India?
If you don't have any taxable income and can't claim any TDS, then you might not need to file. But it's always best to get some proper advice.
What is Resident But Not Ordinarily Resident?
It's a bit of a messy tax situation where your global income isn't fully taxed depending on all sorts of conditions.
What's the penalty for not declaring NRI status properly?
You could face tax demands, interest and even scrutiny proceedings. So, make sure you get it right.