India's Tax Department Is Contacting UAE Property Owners: What It Means for Resident Business Owners

# India's Tax Authority Has Started Asking About UAE Property

The story is straightforward and the implications are not. India's income-tax department has begun contacting nationals who hold real estate in the UAE, seeking explanations for how those acquisitions were funded and whether the assets were properly disclosed, according to Gulf News.

This is not a theoretical exposure. Indian residents and non-resident Indians (NRIs) who own property in Dubai or elsewhere in the UAE are subject to disclosure requirements under India's Foreign Exchange Management Act and its Black Money (Undisclosed Foreign Income and Assets) Act. Failure to report a foreign asset can attract significant penalties. For those who relocated to the UAE and claim non-resident status for Indian tax purposes, the questions become sharper: residency rules, the number of days spent in India, and the source of funds used to buy the property all come under scrutiny.

The mechanism behind this outreach is not new, but its scale appears to be growing. India participates in the Common Reporting Standard (CRS), the OECD's automatic exchange-of-information framework. The UAE has been a CRS-participating jurisdiction, meaning UAE financial institutions report account data, including property-linked transactions, to the relevant authorities, who then share it with treaty partners. India's tax department is evidently acting on that data.

# Why This Matters to Business Owners Specifically

For an individual who simply bought an apartment, the exposure is personal. For a business owner, the picture is considerably more complex.

Many Indian entrepreneurs operating UAE companies hold property through personal accounts, corporate accounts, or a combination. If funds flowed from a UAE company to purchase real estate, and those flows were not properly documented, questions about beneficial ownership, unexplained wealth, and cross-border transfer pricing can surface simultaneously. A UAE free zone company owned by an Indian national, paying dividends or director fees that then funded a Dubai property purchase, creates a paper trail that Indian tax authorities can now follow with some precision.

The UAE's own corporate tax regime, introduced in June 2023 and now fully operational under current rules, adds another layer. Companies must maintain transfer-pricing documentation for related-party transactions. If a business owner has been moving funds informally between a corporate account and personal real estate holdings, the absence of that documentation becomes a problem on both sides of the border.

NRI status itself can be contested. If an Indian national claims UAE tax residency to benefit from the India-UAE Double Taxation Avoidance Agreement, but spends enough days in India to breach the residency threshold, the protection that agreement offers disappears. The property purchase may then be treated as arising from Indian-source income that was never taxed.

# What to Do About It

The first step is a disclosure audit, conducted with legal counsel in both jurisdictions. Business owners should map every property holding against the source of funds, confirm whether those funds appear in filed Indian tax returns or FEMA disclosures, and verify that any UAE corporate involvement was properly documented at the time.

For those with legitimate NRI status, maintaining a contemporaneous record of days spent in each country is no longer optional. Calendar evidence, boarding passes, hotel receipts and entry stamps carry real weight if residency is challenged.

Transfer-pricing documentation for any related-party transactions between UAE entities and Indian group companies should be reviewed and updated before the next filing cycle. The OECD's CRS data-sharing runs on a lag, so information from recent transactions may only now be reaching Indian authorities.

If a disclosure gap exists, voluntary disclosure programmes in India generally attract lower penalties than assessments made after a departmental notice. Taking the initiative, before correspondence arrives, remains the more measured course.

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# Sources

• Gulf News: Bought property in the UAE? Why India's tax department is contacting owners (2026-10-28)