- Rental contract and notice
- Bank clearance and debts
- Furniture, assets - what to sell, what to ship
- Cargo services - fees and options
- Utilities and telecommunications
- Taxes in India on cargo
- NRI tax status and pension funds
- Starting a new life
Dubai: The UAE is a second home to more than 9 million expatriates, out of which a large majority are Indian citizens, some of whom have spent decades in the country. However, at some point of time, many face the prospect of having to move back home or to another country.
Mathew John*  went through this whole process when he retired from his job in Dubai after 12 years in the UAE. This also marked an end to 31 years of expatriate life for John and his wife Susan* . They left the country on November 7, 2020 and have been in India for the last 9 months.
“Retirement and relocation are two completely different experiences. When I had to move from Yemen to Dubai, compared to when I had to leave Dubai to my home – the feeling and the preparations felt completely different.”
Specifically for Indians moving back to India, John added, there are quite a few things to consider including when to amend their Non-Resident Indian (NRI) tax status, moving assets back home, updating bank accounts in both countries etc. We break down how you can make the move without losing time, money, or peace of mind.
How much time do you have?
Retirement and relocation are two completely different experiences. When I had to move from Yemen to Dubai, compared to when I had to leave Dubai to my home – the feeling and the preparations felt completely different.
Depending on how much time you have before leaving, you may have to get prepared to for a lot of leg work. Since John was retiring, he gave three months’ notice as per his work contract. These three months, he spent tying up all loose ends and preparing for his departure from the country – which turned out to be more than enough time to get everything sorted.
However, if you were made redundant or have to leave the country immediately due to an emergency, you will need at least 2 weeks to wrap everything up properly. In the other case, if you know when you’re leaving months in advance, the process is much easier, and as you will see, cheaper.
First things first, give notice to your landlord
According to Dubai’s Real Estate Regulatory Authority (RERA), tenants must give landlords 90-days’ notice for vacating the premises. In addition to that, tenant must check the lease contract for an exit clause, and if there is no exit clause, the tenant may be liable to pay compensation for breaking the contract early. The best way to go forward in this case is to negotiate with your landlord for the most ideal terms for both parties.
“My rental contract actually ended 6 months before I left Dubai,” John said.
“I knew I would leave before the end of the year but didn’t know the exact month at the time. So instead of renewing my contract for a year, I came to an agreement with my landlord to pay rent monthly for six months, with a choice to exit early with a notice of one month.”
So from July to November, John paid rent monthly on the basis of this negotiation and was not tied down by a yearly contract. After further negotiation for an extra three days, the inspection of the premises was scheduled after which John was to hand over his keys.
So, if your contract expiry coincides with your departure from Dubai and you have notified the landlord that you will not be renewing the contract, you won’t be liable to pay such compensation. Even though the law doesn’t require to give notice of vacating premises at the end of the rental period, if your rental contract has a clause of giving notice, then that would apply.
Paying off debt and getting a clearance letter
The next important thing to do is managing your financial accounts. Most residents use credit cards and/or have car loans or personal loans. Not paying your debts can result in a travel ban if reported by the bank, and sometimes your debts may increase due to a simple matter of not tying up loose ends or getting the wrong documentation.
John had no personal loans and he used a car provided by his firm. However, he had several installment plans active on his credit card, using which he purchased gold, and home appliances. He added, “I always pay my entire outstanding amount off every month, so the only debt I had to finish off were these installment plans.” He paid back these amounts early and in full over the three months he had, paying only 1 per cent in addition to the outstanding principal amount, and VAT.
If you owe Dh10,000 in a personal loan and you wish to repay the entire amount early, you will only be liable to pay an extra Dh100, at one per cent of the outstanding principal amount. VAT of 5 per cent may be applicable as per the bank’s terms and conditions on this additional amount.
Paying it all back is not enough, John explained. “Get a clearance letter from your bank,” he said. A clearance letter is a legal document, which may be a paid service, issued by the bank stating that the customer has paid off certain debts to the lender, with reference to a loan or credit card account. Some banks distinguish this from a ‘No Liability letter’ which clears the customer from all obligations with the bank.
So, after paying off your loans and credit card dues, make sure to get either a clearance letter and/or a No Liability letter for all your paid-off debts. This will ensure that your travel will not be hampered due to any wrong documentation or false reports. The letter has a limited validity from date of issue, so check with your bank about the validity period (usually around 15 days) and get the letter depending on your date of travel.
Furniture, assets – sell or keep
The selection of what to take when leaving for good can be confusing for some. However, this was not very hard for John, he said, “I knew the things we would take because whenever we bought an appliance or furniture, even before knowing when we would leave Dubai, we would have the discussion then and there whether the amount we spent would be worth the trip back home.”
Major furniture for John included a king-size bed, a dining table with six chairs, a sturdy sofa-bed, and three [two-seater and one-seater] couches – all except the bed were purchased second-hand. He also had a TV stand and cabinet, a wardrobe and two office cupboards. In terms of appliances, John had invested in a TV, an automatic washing machine and convection microwave oven that were bought in new condition. The fridge was the only second-hand appliance, and all the mentioned items were in good condition.
John managed to sell the couches, the bed frame and the fridge by listing them online. The dining table, TV, microwave oven, washing machine, one office cupboard and a TV stand, he decided to include in his cargo shipment home. The rest he gave to family and friends who needed it, during the last few days of his stay in Dubai.
After this he had a clear idea of what would be included in his shipment home and John took quotes from various movers.
Cargo shipment and rates
Most cargo companies charge either a per kilo rate or per box rate, which can also vary based on the mode of transport – ship, air or express air. While some give approximate quotes based on the size of the apartment and the number of bedrooms, most will ask to come to your place, for a free survey, to see the items before giving a quote. Rates per kilogram range from Dh6 to Dh15, with delivery ranging from 7 (express) or 20 days (air cargo) to 40 (ship) days.
John chose a mover who gave quotes by the box, and he chose the ‘Jumbo Box’ option, for transport by ship. An approximate size for this box would be 8ft x 7.5ft x 4ft. Whether the box would be full or not, the quote is fixed for the box, which can usually carry around 350 kilograms if full. Some suppliers may not have this option.
In total he paid, Dh2,325 in Dubai to these movers for one Jumbo Box and five small packages. The amount included the moving charges, destination clearance, export documentation and drop-off to John’s Kerala address. This quote was for shipping the cargo to Kochi by sea – while that gave John a cheaper quote, it also meant being ready to wait around one month to get his belongings in Kerala.
Insurance was not included in the quoted price for John. However, most suppliers charge their per kilo rate including insurance – so make sure you ask about it.
Utilities and telecommunications
John said cancelling his TV, broadband and landline plan was easy to do online. All he had to do was call the customer care within 48 hours of his last day in Dubai, pay any pending dues and give his day of departure. The service was automatically disconnected once he did this, and John also made sure he received an email about the cancellation.
As for the Dubai Electricity and Water Authority (DEWA) connection, you would need to apply for moving out on the web portal of DEWA. Select the option for ‘Move Out’ and login with your DEWA ID or UAE Pass.
“I applied online for the Final Bill in the week before I moved out,” John said. The final bill is generated and sent to the registered email ID within 24 hours of application, or will be generated and sent on the basis of the specified date of moving.
On this portal you can select the date you plan to move out, and also select the mode of receiving your security deposit back. The service will get disconnected from your name on the date specified after you’ve paid the final bill.
Taxes on cargo in India
The customs tax on goods shipped from UAE, that don’t fall under the duty-free allowance, is around 36.05 per cent, charged on the market rate the same product in Kerala. Used personal goods and professional items of specific value limits are exempted, depending on certain terms and conditions.
Once the items reached Kochi, John spent Rs23,000 (Dh1,137) in taxes for custom clearance. “You have to plan to spend an entire day at the Customs Clearance office, and you may have to coax the officers to speed up the process,” John said. The couple had a new 52” TV that John bought in the UAE a couple of months before leaving. He was also taxed on certain other items that customs officers chose to levy tax on.
The cargo company had included transport from the customs office to John’s home address as well as part of their door-to-door delivery. John explained, “That was the best option for me, since it can be difficult and expensive to set up a transport once you get to Kerala.”
NRI Tax status, pension funds
“As of now I have not changed by bank account status to Resident,” John said, about his tax status in India. He also kept his UAE bank account active since he knew funds would come in even after his departure with respect to his settlement and other dues owed. UAE bank accounts usually stay active until the expiry date of the linked Emirates ID, after which banks ask for updated documents.
According to Indian tax laws for non-resident Indians who have returned, NRI tax status will remain active for 180 days of continuous stay in India. After that, the tax status will either be resident, where all income is taxed, or Resident Not Ordinarily Resident (RNOR), which will allow for tax-free foreign income, with taxes only on income earned in India. John plans to keep his NRI accounts active for as long as he can.
The conditions for RNOR status are either:
- If you have been an NRI in 9 out of 10 financial years preceding the year, or
- You have been in India for 729 days or less in the preceding 7 financial years
John had also started Pravasi pension plans for his wife and himself. The monthly payments as an NRI for the basic plan was Rs300 (Dh15) each, which he has already paid for one year on both plans. “Once I show proof that I am a tax resident of India, I only have to pay Rs100 (Dh5) per month for each plan,” John added. The plan will start pension payouts when the applicant turns 60, with Rs2000 (Dh100) per month.
On land around his house, John started planting vegetables and fruits, taking advantage of farming subsidies given by the government. He also set up complete solar energy systems in the house and put up CCTV cameras for security purposes.
John also took advantage of Treasury deposit rates – moving a portion of his funds from low interest rate accounts to fixed deposits that would give him almost 6 per cent in interest annually. “I am on the lookout for supplementing my retirement funds as much as possible,” he explained.
Starting a new life
For John and his wife, life in Kerala is almost a complete reset. Though born and brought up in Kerala, the couple spent more than half of their lifetimes and all of their married lives outside the country.
“It’s not the sitting back and relaxing that most people think retirement is. It surely takes work and is not easy. There is a certain level of culture and lifestyle shock and there is so much work to be done, in and around the house. But life is invigorating and exciting nonetheless,” John said.
“Of course we miss the expat life, in Dubai and more so, our life in Yemen. But this is our home, and slowly but surely we will grow to love it just as much.”
*Names changed on request