It’s one of the most common conversations in Dubai’s crypto community. An Indian trader or founder moves to Dubai, attracted by zero personal income tax and a clear crypto regime, and assumes that India’s 30% crypto tax no longer applies. Sometimes that’s right. Often it isn’t.
India’s residency rules were tightened specifically with people in zero-tax countries in mind, and the new Income-tax Act, 2025 has carried those rules forward. This guide explains when Indians in Dubai remain taxable in India on crypto, how the “deemed resident” rule works, what the India-UAE tax treaty does and doesn’t do, and the disclosure obligations that trip people up.
How India decides whether you’re resident
The Income-tax Act, 2025 applied from 1 April 2026, and Section 6 of the new Act continues the central residence framework using the concept of a “tax year” (TaxGuru). The basic test is still physical presence: broadly, 182 days or more in India in a tax year, or 60 days in the year combined with 365 days over the previous four years. For Indian citizens and persons of Indian origin visiting India, the 60-day limb is relaxed, but with an important exception for people with significant Indian income.
That exception is the 120-day rule. An Indian citizen or person of Indian origin whose income from Indian sources exceeds ₹15 lakh and who stays in India for 120 days or more (but less than 182) can become resident, typically as “resident but not ordinarily resident”. If your Indian income exceeds ₹15 lakh and you have spent 365 days or more in India over the previous four years, the safe ceiling drops to 119 days (UAE Expert Hub).
Many Indians in Dubai track their days carefully against the 182-day rule but forget the 120-day rule. Long summer visits, family emergencies and business trips can add up quickly, so keep an accurate day count every year.
| Test | How it works | Why it matters in Dubai |
|---|---|---|
| 182-day test | 182 days or more in India in a tax year | Long summer visits, family emergencies and business trips add up quickly |
| 60 days plus 365 days | 60 days in the year combined with 365 days over the previous four years | Relaxed for Indian citizens and persons of Indian origin visiting India, subject to the 120-day rule |
| 120-day rule | Indian income above ₹15 lakh and 120 days or more (but fewer than 182) in India can lead to “resident but not ordinarily resident” status | If you also spent 365 days or more in India over the previous four years, the safe ceiling drops to 119 days |
| Deemed resident (Section 6(7)) | An Indian citizen with Indian-source income above ₹15 lakh who is not liable to tax in any other country is resident regardless of days | The UAE levies no personal income tax on salary, so the rule is aimed squarely at Indians in Dubai |
The deemed resident rule: aimed at zero-tax countries
The deemed resident rule is the provision that matters most to Indians in Dubai. Section 6(7) of the 2025 Act makes an Indian citizen resident regardless of days spent in India if two conditions are met together: Indian-source income above ₹15 lakh, and not being liable to tax in any other country by reason of domicile, residence or a similar criterion (UAE Expert Hub). The UAE levies no personal income tax on salary, so an Indian citizen in Dubai with more than ₹15 lakh of Indian income sits squarely within the rule’s intended scope (UAE Expert Hub).
There’s an important nuance. Under the 1961 Act, a person who was resident only because of the deemed resident rule was treated as “resident but not ordinarily resident”, and taxed mainly on Indian income. The tax department’s FAQ confirms the not-ordinarily-resident criteria are unchanged under the 2025 Act, but doesn’t state in terms whether a deemed resident is automatically treated as not ordinarily resident (UAE Expert Hub). Some online commentary claims deemed residents are now “full residents” taxed on worldwide income; that is not settled, and the position should be checked carefully for your facts.
What does this mean for crypto? If you’re a deemed resident, your Indian-source income is taxable in India, and crypto gains connected with India, for example trades on Indian exchanges, may be taxed at India’s flat 30% with 1% TDS. Crypto income from foreign sources is generally outside Indian tax for non-ordinarily-resident individuals, but the boundary between Indian and foreign source for crypto isn’t always clear.
What the India-UAE tax treaty does, and doesn’t do
India and the UAE have a double taxation avoidance agreement. Where a person is resident in both countries under their domestic laws, the treaty’s tie-breaker rules (permanent home, centre of vital interests, habitual abode and nationality) can decide which country has primary taxing rights. To rely on the treaty, you’ll normally need a UAE tax residency certificate.
But the treaty doesn’t remove Indian tax on Indian-source income in every case. It allocates taxing rights income by income. India generally keeps the right to tax income from Indian property, Indian business connections and, depending on the treaty’s terms, certain gains. And the treaty only helps if you’re a treaty resident of the UAE, which requires meeting the UAE’s own residency criteria and documenting it.
For crypto specifically, treaty treatment of gains from digital assets isn’t always straightforward, and the treaty’s capital gains article needs to be read carefully against the facts. Don’t assume a UAE residency certificate alone ends your Indian exposure.
Disclosure, reporting and the mistakes that cost most
The most expensive mistakes for Indians in Dubai are often about reporting, not tax rates. If you’re resident and ordinarily resident in India for a year, you must disclose foreign assets, including crypto on foreign exchanges and in self-custody wallets, in Schedule FA of your Indian return. Undisclosed foreign assets can attract India’s Black Money Act, with heavy tax, penalties and possible prosecution.
India has also made crypto far more visible. Indian exchanges deduct 1% TDS on crypto transfers, and since 1 April 2026, reporting entities including exchanges must report crypto transactions under Section 509 of the Income-tax Act, 2025. International information exchange on crypto is also expanding. An Indian citizen who keeps trading on Indian exchanges after moving to Dubai is creating a clear Indian record.
Other common mistakes include not tracking days in India accurately, keeping significant Indian income (rent, interest, dividends, business income) without realising it crosses the ₹15 lakh threshold, failing to obtain a UAE tax residency certificate, and leaving Indian bank and demat accounts in “resident” status after moving. Each of these can be fixed, but fixing them early is far cheaper.
Planning and remedies
If you’ve moved to Dubai or plan to, map your Indian income sources, track your days, decide whether you need a UAE tax residency certificate, convert Indian accounts to NRO or NRE status, and review where your crypto is held and traded. If you’ve already made mistakes, India’s updated return (ITR-U) mechanism allows corrections within 48 months of the end of the relevant assessment year, with additional tax, which is far cheaper than penalties after a notice. If you receive a notice questioning your residential status, respond with evidence (passport stamps, UAE residency documents, tax residency certificate) and appeal adverse assessments to the Commissioner (Appeals) and the Income Tax Appellate Tribunal. For Indians in Dubai, the deemed resident rule is the single most important crypto tax risk to understand.
Related reading: how Indian residents investing in crypto through Dubai should handle the LRS and Schedule FA, setting up a Dubai holding company as an Indian founder, paying Indian developers from a Dubai Web3 company, why Dubai exchanges also need FIU-IND registration, crypto tax in India vs the US, crypto tax in India vs the UK and what to do about a crypto nudge email; also returning to India from Dubai with crypto, paid in crypto in Dubai: Indian tax for professionals and gifting crypto from Dubai to family in India.
Quick answers
Do Indians in Dubai pay Indian tax on crypto?
It depends on residential status. Non-residents are taxed only on Indian-source income, but the deemed resident rule and the 120-day rule can make Indians in Dubai resident in India.
What is the deemed resident rule?
Under Section 6(7) of the Income-tax Act, 2025, an Indian citizen with Indian-source income over ₹15 lakh who isn’t liable to tax in any other country is treated as resident in India.
Does a UAE tax residency certificate protect me?
It helps you claim India-UAE treaty benefits, but it doesn’t automatically remove Indian tax on Indian-source income.
What is the 120-day rule?
An Indian citizen or person of Indian origin with Indian-source income above ₹15 lakh who spends 120 days or more (but fewer than 182) in India in a year can become resident, typically as resident but not ordinarily resident. The ceiling drops to 119 days if they also spent 365 days or more in India over the previous four years.
Do I have to disclose crypto held abroad if I live in Dubai?
If you are resident and ordinarily resident in India for the year, foreign assets, including crypto on foreign exchanges and in self-custody wallets, must be disclosed in Schedule FA. Non-residents do not have this obligation.
Final word
Halverton & Co. is an Indian law firm advising Indian founders, investors, NRIs and crypto businesses in Dubai and across the UAE on Indian law, including Indian tax residency, crypto taxation, foreign asset disclosure and tax notices for NRIs in Dubai. We practise in Jharkhand, Maharashtra and before the Supreme Court of India, and work alongside UAE-licensed counsel, who advise on UAE law. Halverton & Co.: Where tech needs law! If you have a question about Indian law, write to us at office@halvertonandco.com, or get in touch.
This article reflects developments reported up to early October 2026. It is for general information only, is not legal advice, and does not create an advocate-client relationship. Halverton & Co. is an Indian law firm and does not advise on UAE law; UAE-law points should be confirmed with UAE-licensed counsel.
Related practice area
Crypto, Web3 & Digital Assets
Advice for virtual digital asset businesses on registration, reporting and structure.
View the practice area
