A Non-Resident Indian (NRI) living in the UAE mistakenly claimed treaty relief on gains derived from Indian shares and mutual funds. This individual has been residing in the UAE for employment since February 2024 and regularly invests in listed shares and mutual funds in India.
Under the India-UAE treaty, an NRI can claim treaty relief on gains from Indian mutual fund units. However, this relief does not extend to gains from shares in Indian companies.
The NRI incorrectly applied this treaty provision when filing their Income Tax Return (ITR), claiming exemption on share gains as well, which is contrary to tax regulations.
According to tax experts, the deadline for filing a revised return has already passed. Despite this, there may be an avenue to correct the error by filing an updated return.
An updated return allows taxpayers to rectify mistakes made in previous filings. This process can help the NRI ensure compliance with their tax obligations.
Experts advise taxpayers to carefully review applicable tax provisions based on their investments and residency status to avoid such errors.
