How are my UAE investments in India taxed?

—Name withheld on request

There will be no income tax effect on investing in Dubai. However, certain compliances have to be met to the rules laid down by the Reserve Bank of India and FEMA (Foreign Exchange Management Act) as the money is being remitted abroad.

You may also need to consider LRS (Liberal Remittance Scheme) for this situation. Once the return on investment is achieved, there will be a tax implication.

The establishment of the company in Dubai shall be governed by the laws of the United Arab Emirates in accordance with the particular form or nature of organization that permits non-residents of that country.

The basis for identifying a legal form, applicable laws and regulations, depends primarily on business needs. The legal form of business must match the business activity. Yes, we have DTAA with UAE.

If a permanent resident of a foreign country, who is also a non-resident as per FEMA, resides in India for more than 182 days, will the income received by him by way of interest on Non-Resident External (NRE) account be exempted under . act?

—Name withheld on request

Generally, those who come to India temporarily and do not intend to stay here permanently, can continue to claim exemption on interest earned from their NRE account.

Their status would also be that of a non-resident, or resident, but would not ordinarily be a resident for tax purposes. They can continue to claim interest exemption on NRE account till they decide to permanently reside in India.

Archit Gupta is the founder and CEO of Clear.in.