Deadline Looms: Declare Your Dubai Property Now

Are You Indian with Property in Dubai? A Crucial Deadline is Approaching: Severe Penalties May Follow If You Don’t Declare Your Assets On Time

In the United Arab Emirates – particularly in Dubai – the number of properties purchased by Indian citizens has significantly increased over the past few years. The Indian Income Tax Department not only monitors this trend, but also strictly controls it. Starting from November 28, 2025, thousands of individuals liable for taxes in India who own foreign properties or financial assets, such as those in Dubai, but have not declared them in their Indian tax returns, will receive SMS and email notifications.

What Does the “Nudge” Campaign Mean?

The second phase of the so-called “Nudge” campaign aims to encourage voluntary tax compliance. During the campaign, the Indian tax authority warns the affected taxpayers: either they voluntarily correct their tax returns by December 31, or they may face severe financial penalties and legal consequences later.

The warning is based on financial data received through the Automatic Exchange of Information Agreement (AEOI), the Common Reporting Standard (CRS), and the Foreign Account Tax Compliance Act (FATCA), which is shared by more than 100 countries, including the UAE.

Who Does the Warning Apply To?

It is important to understand that the campaign does not affect Indian citizens who are not Indian tax residents, known as NRIs (Non-Resident Indians), who are not required to file tax returns in India. However, those who qualify as Indian tax residents – for example, spending more than 182 days a year in India – are required to report all foreign assets, bank accounts, and investments.

The Consequences: Severe Penalties

Anyone who fails to declare their foreign assets can expect serious sanctions:

A fine of 1 million Indian rupees (approximately 41,000 dirhams) for undeclared assets

A 30% tax on undeclared income

Up to a 300% penalty on the amount of imposed tax

The Indian tax authority does not intend these as mere threats: the first Nudge campaign in November 2024 already proved that this method works. At that time, more than 24,000 taxpayers declared previously unreported foreign assets and hundreds of millions of dirhams worth of foreign income.

Focus on Dubai

The campaign pays special attention to Dubai, as Indians have been among the largest foreign property buyers in the emirate for years. In 2024, Indian buyers accounted for 22 percent of property transactions in Dubai, investing around 150 billion dirhams in the city.

These buyers may now be required to properly fill out the so-called Schedule FA (Foreign Assets) and Schedule FSI (Foreign Source Income) forms in their Indian tax returns if they are obligated to do so based on their tax residency status.

Visible Wealth

Financial data almost freely flows between India and the UAE. Tax authorities now have access to:

Data on bank accounts held in Dubai

Details of investment products and funds

Documentation related to property purchases

Corporate ownership information

This means that what might have remained hidden before now appears in accessible databases – and can be compared with Indian tax returns.

What Should You Do if You Receive a Warning?

If you receive an SMS or email from the Indian tax authority, it is advisable to take the following steps as soon as possible:

1. Log into the incometax.gov.in website

2. Open your tax return for the Assessment Year 2025–26

3. Thoroughly check the Schedule FA and Schedule FSI fields

4. If necessary, correct your return and resubmit it by December 31, 2025, at the latest

This is a final opportunity to correct without suffering more serious consequences.

Appeal to Professional Organizations

The Indian Tax Office has urged companies and professional organizations – including auditing chambers – to inform their members and employees of the new rules because many are unaware that they must declare foreign assets as well.

According to Indian tax advisors operating in Dubai, this is not just a warning – it is a chance to put one's affairs in order before the matter leads to more severe sanctions. A current penalty of 41,000 dirhams could easily become 400,000 dirhams if the tax authority initiates formal proceedings.

Summary

The Indian tax authority is now strictly and digitally supervising offshore assets, with a specific focus on Dubai. Indian tax residents who own property, bank accounts, or corporate interests in the UAE – or other countries – but do not declare them in India, can expect serious financial and legal consequences.

The December 31 deadline is approaching, and with automatic data sharing, the authorities already know your true wealth. The only question is: do you declare, or wait for them to act?

This is not just an administrative formality, but the new norm of an increasingly transparent world. If you have assets in Dubai, it’s worth consulting a tax advisor and sorting out your Indian tax return – while there's still time.

(Source of the article: Based on the announcement by the Indian Income Tax Office.)