INCOME TAX19 Oct 2026
NRI who wrongly claimed share gains exemption can use ITR-U
A non-resident Indian in the UAE claimed India-UAE treaty relief on capital gains from both Indian shares and mutual fund units for FY 2024-25. The mutual fund claim was right; the share claim was wrong, because the treaty lets India tax share gains. The revised return deadline of 31 December 2025 has passed, so an updated return is the route left.
Key Statutory Highlights
- Under the India-UAE treaty, gains on shares of an Indian company stay taxable in India, so the exemption claimed on those gains was incorrect.
- Gains on mutual fund units fall under the treaty's residual clause and are taxable only in the UAE, so that exemption claim stood.
- An updated return filed during FY 2026-27 carries additional income tax of 25% of the tax and interest payable.
Actionable Advice for Taxpayers / Founders:File an updated return to report the share gains and pay the tax with interest under sections 234B and 234C; filing it in FY 2026-27 adds 25% of the tax and interest.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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