Indian expats in UAE race against time to amend higher tax rule for NRIs in Union Budget 2025

Dubai: With India’s Finance Minister set to present the Union Budget 2025 on Saturday, Non-Resident Indians (NRIs) in the UAE and other Gulf countries have made a last-minute push to demand tax parity in the treatment of capital gains from property sales.

Over the past few days, community associations have joined forces in an urgent appeal, emailing India’s Finance Minister Nirmala Seetharaman to amend the higher tax rule that has placed NRIs and Overseas Citizens of India (OCIs) at a disadvantage and involved Members of Parliament to take up the matter.
As first reported by Gulf News on January 23, the disparity stems from the removal of the indexation benefit for NRIs on long-term capital gains from property sales. Unlike resident Indians, who can choose between a 20% tax rate with indexation or a 12.5% flat rate, NRIs must pay a flat 12.5% tax without the benefit of indexation, significantly increasing their tax burden from July 2024.

Urgent community push for parity
In response, expatriate organisations have mobilised swiftly by emailing formal appeals before the budget is finalised. A widely circulated letter template, titled “Request for Parity in Tax Treatment of NRIs and OCIs under New Capital Gains Taxation Rules for Real Estate Property,” has been used to urge the Finance Ministry to rectify the issue.

“We are simply asking for the same choice that resident Indians have,” said Paul T Joseph, president of AKCAF Association, a Dubai-government licensed umbrella group of expat alumni members from over 100 colleges in Kerala.
“If the government wants to encourage NRI investment in India, treating them equitably in tax policies is crucial. We have written to the minister so that the NRIs’ plea will be heard,” Joseph told

The letter highlights that NRIs have always invested in Indian real estate expecting fair treatment. However, the amendment has created an “unjust disparity” that burdens them with higher taxes despite their significant contributions to India’s economy through remittances and investments. In fact, the four-million-strong Indian community in the UAE is the second largest contributor to the Foreign Exchange Remittances into India which touched a record $125 billion last year.
Raising voice through MPs
Indian expatriate organisations have also sought the intervention of Indian parliamentarians.
Nissar Thalangara, president of the Indian Association Sharjah, said that they have taken up the matter with lawyer-turned-Member of Parliament Haris Beeran. “Based on our request, he has studied the matter and submitted a letter to the minister. He will be our voice in Parliament,” he said.

Similarly, another Kerala MP, Hibi Eden, has intervened following appeals from Gulf-based Indian expats, said chartered accountant Sreejith Kuniyil, who has been leading the fight for tax parity and helped the community groups with a template of the letter to the minister.

Legal battle remains an option
Kuniyil, who previously assisted an NRI in Kuwait in filing a writ petition in the Kerala High Court over the issue, said that if the government does not address the matter in the budget, NRIs may have to continue their legal fight for justice.

“Community groups have taken up this matter on behalf of all expats, as this affects thousands of Indian property owners living abroad. We firmly believe this tax change was an oversight, and we need to rectify it before it becomes law,” Kuniyil said.

He remains hopeful that the Finance Ministry will act: “This is a critical moment. The government must ensure fairness for the global Indian diaspora.”

As the budget day approaches, the expatriate community is awaiting a response, hoping their voices will bring about a fair resolution for NRIs under Indian tax laws.

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