India New Tax Law: India’s new tax law comes into effect, Indians living in UAE will get big discounts

The Government of India has implemented ‘Personal Income Tax Act 2025’ to simplify the process of paying tax. This law has become effective from April 1, 2026, due to which paying tax will now be much easier than before. The special thing is that many reliefs have been given for Indians (NRIs) living in Dubai and other Gulf countries.

Major changes in the tax system

The government has brought this new law by removing the old 1961 law. Its main objective is to modernize tax rules and reduce paperwork. Now tax payers will not have to get entangled in old and complex rules. The biggest change is that now instead of words like ‘assessment year’ and ‘previous year’, only ‘tax year’ will be used.

What is special for NRIs and expatriates

This law is very beneficial for Indian citizens living in UAE and other countries. According to the new rules, NRIs will not have to pay any tax on their income earned outside India. They will have to pay tax only on the income they have earned in India or deposited in India.

Some other key points for NRIs are:

• Tax exemption on interest received from FCNR and NRE accounts will continue.
• If an NRI’s income is only from investments or long term capital gains and TDS has been deducted on it, then he will not need to file returns.
• The rules of residential status will remain the same, that is, those who stay in India for 182 days or more in a year will be considered residents.

Experts’ opinion in Dubai conference

‘Tax 360’ conference was organized in Dubai on 18 June 2026, which was attended by more than 300 accounting professionals. Abdulkadir Obed Ali, chairman of the UAE Internal Auditors Association, said that simplifying the tax structure makes the economy more transparent and stronger. At the same time, CA Rishi Chawla, Chairman of Dubai Chapter of ICAI, said that this new system is based on technology and transparency which is suitable for the rapidly growing economy.

Tax expert Dixit Jain has advised Indians living in UAE to prepare their documents for the financial year 2025-26 soon, so that any kind of penalty or hassle can be avoided while filing returns.