226. Dual taxation - UAE and

India tax treaty

Q. Dear Mr Chand, I am highly impressed with your website and the work you have put in to this. I am a surgeon in London who has an Indian passport and will be returning to India. I have a company in free tax zone in Dubai that sells and buys flats/houses in UK. I am keen to return to India later this year and work as a surgeon in my hospital in India while continuing the above company business. I am uncertain on a few points- 1. Once I return to India while I continue to enjoy the tax benefits on the profits of this business as UAE and India have a DTTA 2. I am eligible for British Citizenship in June this year and OCI later this year. Do you think there is any benefit for us in future for investments etc in India to have OCI or would be better off as Indian Citizens. regards Mr Ajay Rajan Gupta A. Indian residents are taxed on their income from outside India. Under the DTTA agreement between India and UAE you will get some relief from Double taxation as you will get credit for tax paid in UAE. However, your current status will change to some extent. The reason for this is that while currently you may be avoiding taxation in India on your UAE income due to your non- resident status which will probably change when you settle in India. While those deemed to be residents in India for taxation purposes are taxed on income earned outside India. Generally, those deemed as non residents for taxation purposes are taxed only on income from within India and income earned outside India is not taxable. Consult a professional accountant for detailed information. As for your second question regards to living in India with OCI or Indian citizenship, I personally think that for those who wish to settle permanently in India and conduct business in India have more avenues open to them with full Indian citizenship. However this is one decision that needs to be taken at a personal level and sometimes only economic welfare should not be the only deciding factor. After all while dollars and cents may be important, a sense of personal satisfaction has to be taken into account when deciding many things.