What’s in the blog?
This blog explores how NRIs living in the UAE, UK, US, or Singapore can benefit from India’s DTAA treaties and the new-age GIFT City ecosystem. If you’re looking for tax-smart, compliant ways to grow your money back home, this read is your guide.
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You may live in New York, Dubai, London, or Singapore, but let’s admit it, your heart still skips a beat at the mention of India. The mango season, late-night cricket matches, chaos of your family WhatsApp group… there are numerous things that might be making you nostalgic.
And along with all that emotion comes something else… your investments in India. I have a number of relatives, friends, and clients living abroad, and one of the most common concerns I’ve heard them discussing is taxation on their investments in India.
They often worry about being taxed twice, in India and the country where they reside, for the investments they make or want to make in India.
If this concern sounds familiar, this guide is for you. In this blog, I am breaking down two powerful tools — DTAA (Double Tax Avoidance Agreement) and GIFT City (Gujarat International Finance Tec-City) — that can help you protect your earnings, grow your wealth, and stay compliant, all while keeping your money rooted in the country you still call home.
What is DTAA and Why It Feels Like Home-Cooked Food for Your Finances
The way home-cooked food is made with love, keeping your health in focus, the DTAA (Double Tax Avoidance Agreement) pact has been signed by India, with care, keeping your financial health in focus. This pact ensures that you are not taxed twice for the same income.
So whether it’s interest from your NRE/NRO deposits, dividends from Indian mutual funds & shares, or capital gains from property or equity, DTAA ensures that you’re not paying tax in both countries for the same income.
Here’s how it works:
- Either you pay tax in one country and get an exemption in the other
- Or you pay tax in both, but get a credit for the Indian tax when filing in your resident country
- In both cases, DTAA helps you avoid the burden of double taxation and lets you keep more of what you earn.
What is GIFT City and Why NRIs Are Quietly Turning to It for Tax-Smart Investing
Now, your country has not only ensured you are not double-taxed but has also opened doors for you to generate passive income from your home country.
Located in Gujarat, GIFT City (Gujarat International Finance Tec-City) is India’s own financial zone that follows international standards, giving NRIs access to global investing tools, with the emotional reassurance of staying connected to India.
Here’s what makes it special:
- No capital gains tax on specific listed securities
- Interest on foreign currency deposits is 100% tax-free in India for NRIs
- You can invest directly in global products – in USD
It’s a setup designed for clean, long-term wealth creation, especially if you want your money to stay compliant, globally mobile, and proudly Indian at heart.
How DTAA and GIFT City Work Together for NRIs in the US, UK, UAE, and Singapore
“When DTAA protects you from double taxation and GIFT City gives you zero-tax investment options, you don’t just save; you grow smarter. Together, they create one of the most tax-efficient ways for NRIs to generate passive income.”
The practical impact of DTAA and GIFT City varies depending on where you live. So, let’s break it down country by country.
For NRIs Living in Singapore
Singapore is one of the most tax-efficient countries in the world. It does not tax foreign income unless you remit it into Singapore.
So if you’re earning capital gains or interest from your India-based investments, especially through GIFT City, and you’re not bringing that money into Singapore, you don’t pay tax there.
Now, combine that with GIFT City benefits:
- No capital gains tax on select securities
- Zero tax on foreign currency deposits in GIFT City
…and what do you get?
No tax in India. No tax in Singapore. That’s double happiness.
Pro Tip: Use GIFT City for medium to long-term investments you don’t need to remit immediately, and let your capital grow untouched.
For NRIs Living in the United States
Honestly, taxes in the US can feel like a maze. You’re earning in dollars, investing in rupees, and juggling two tax systems.
But here’s the good news: DTAA between India and the US makes things easier.
For example:
Under India-US DTAA, Dividends from Indian stocks or mutual funds are taxed at just 15% in India (instead of the standard 20%)
When you file your return with the IRS, you can claim a foreign tax credit for the tax paid in India.
This means there’s no painful double taxation.
Now add GIFT City into the mix:
- If you invest in USD-denominated mutual funds or listed securities in GIFT City, capital gains are exempt in India
- You just handle the US side of tax, and even that comes with relief, thanks to the credit benefit under DTAA
So instead of getting taxed both here and there, you get a structure that’s legal, transparent, and efficient.
And if you’re planning retirement in India, or parking funds for your family back home, GIFT City offers a clean, compliant, and tax-smart way to invest in India, without unnecessary tax leakage.
For NRIs Living in the UAE
Living in the UAE comes with one big advantage that there’s no personal income tax. That’s already a blessing. But it gets even better when you bring DTAA and GIFT City into the picture.
Let’s start with the basics:
- Any interest earned on your USD deposits in GIFT City banks is completely tax-free in India
- And since the UAE doesn’t tax your global income, there’s no tax there either
No tax here, no tax there. Just pure, uninterrupted compounding. It’s a rare win-win. And the best part? You’re not wiring money to an unfamiliar offshore destination.
You’re investing right back in India with global-level compliance, full transparency, and a sense of connection.
Whether it’s for international inheritance, estate planning, or simply keeping wealth safe and growing for your family, GIFT City offers a modern bridge between your life in the UAE and your financial roots in India.
For NRIs Living in the United Kingdom
UK taxes can feel a bit stiff, especially when it comes to foreign income as HMRC watches global income very closely. But, if you plan smartly, you can stay tax-efficient.
The DTAA between India and the UK ensures you’re not paying twice for the same income.
Here’s how it plays out:
- The dividends earned in India are taxed at 15%, not 20%.
- In the UK, you might still owe capital gains tax, but you get a foreign tax credit for what you paid in India.
Now, let’s bring GIFT City into the picture.
If you invest in GIFT City-registered IFSC mutual funds, ETFs, or international stocks via Indian platforms, you may be able to:
- Completely avoid capital gains tax in India
That’s India giving your investments a global-standard environment with tax efficiency, transparency, and control. And because everything is regulated and reported, you’re fully compliant when declaring overseas investments in the UK, with no grey zones.
If you’re saving for a future home in India, building an education fund for your child, or creating a retirement cushion back home, GIFT City gives you the best tax-efficient investment option.
My Take
For years, investing in India from abroad felt like threading a needle… complex rules, unclear tax implications, and the constant worry of doing something ‘wrong.’
But not anymore.
With DTAA and GIFT City, India is quietly but powerfully telling its global citizens: “You don’t have to choose between global ambition and Indian roots. You can have both.”
Whether you’re in the UAE, the UK, the US, or Singapore, you now have a chance to build wealth in India that’s clean, compliant, and smart.
Drop us your email ID if you want to be notified for our upcoming GIFT City webinars or directly book a 15-minute free call, and let’s walk you through your GIFT City roadmap.
Frequently asked questions (FAQ)
GIFT City IFSC (International Financial Services Centre) is a financial zone in Gujarat created by the Indian government to make global investing easier and more tax-efficient. It allows NRIs and foreign investors to invest in India under relaxed rules with benefits like no capital gains tax, no TDS, and full repatriation of funds.
It depends on where you live. Currently, India has a comprehensive DTAA with 94 countries and a partial one with 8. If you are a resident of any of those countries, then you may be eligible for DTAA benefits.
Yes, you’ll need to open an account with a GIFT City-registered intermediary (like an IFSC bank or asset management company). The process is digital and hassle-free.
Not really. While earlier GIFT City catered more to institutional players, it’s now open to retail investors too, especially NRIs. You can start with moderate amounts and still benefit from the tax efficiencies.
