NRIs in UAE: 8 ITR mistakes that might delay your Indian tax refund this year

Filing ITR from UAE? Avoid these common mistakes to ensure timely tax refunds from India

Last updated: August 02, 2025 | 04:04

2 MIN READ

Indian expats need to ensure your bank account is linked to PAN, active, and correctly updated on the Income Tax portal.

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Dubai: If you're an NRI living in the UAE and expecting an Indian income tax refund, watch out for these filing slip-ups. One small error can delay your refund—or even trigger penalty notices.

1. Wrong or inactive bank account

If the Indian refund route is to your unmapped, dormant, or NRE/NRO account that isn’t validated, it will bounce. Ensure your bank account is linked to PAN, active, and correctly updated on the Income Tax portal.

2. Using the wrong ITR form

Each type of income—salary, rental, capital gain, foreign assets—has a specific ITR form. Filing with the wrong one can result in a defective return, causing delays.

3. Mismatched TDS or income records

Your ITR must align with Form 26AS, AIS, and TIS. Missed TDS entries or employer-provided Form 16 errors can hold up processing. Cross-check these before filing.

4. Forgetting to e-verify the tax return

You have 30 days from filing to e-verify using Aadhaar OTP, net banking, ATM, or demat login. Without e-verification, your return is considered invalid and refund will stall.

5. Overclaiming or incorrect deductions

Deductions under 80C, 80D, 80G must be backed with proof. Overdoing or misreporting can draw scrutiny and hold up refunds.

NRI Deductions

NRIs can claim tax deductions under Sections 80C, 80D, and 80G, but with some limits. Under 80C, up to ₹1.5 lakh can be claimed for life insurance, ELSS, home loan principal, and kids’ tuition fees in India. Investments like PPF and NSC aren’t allowed for NRIs. Under 80D, NRIs can claim ₹25,000 for health insurance premiums (self, spouse, kids) and up to ₹50,000 more for senior citizen parents—totalling up to ₹75,000. 80G allows deductions on donations to approved charities in India, but only if paid digitally or via cheque—cash donations over ₹2,000 won’t qualify.

6. Leaving out income sources

Interest from FD/savings, dividends, freelance earnings, or rental income must all be disclosed—even if they seem minor. Undisclosed income often causes mismatches and delays.

7. Filing late or missing the deadline

Delaying past 31 July 2025 may lead to late fees, interest charges and slower refunds—you might also forfeit interest on the due refund.

8. Ignoring notices from Tax Department

If your return is flagged as defective, the IT Department sends a notice. These appear via SMS, email, or your portal inbox. Ignoring them stalls your refund—respond promptly.

Also Read: NRI alert: Here is what Indian expats in the UAE can do about higher income tax

8-point ITR checklist:

Bank account mismatch: Refunds won’t go through if the account is invalid, inactive, or not linked to your PAN.
Wrong ITR form: Filing with the incorrect form can lead to delays or rejection.
Data mismatch: Discrepancies between your ITR and Form 26AS, AIS, or TIS can trigger review.
No e-verification: If you don’t e-verify within 30 days, your return is treated as incomplete.
Unsupported deductions: Claiming deductions without proper proof may delay or stop refunds.
Income not disclosed: Missing interest, rental, or freelance income causes mismatches and flags.
Late filing: Delayed returns can attract penalties, interest, and slower refunds.
Ignoring notices: Missing or not responding to tax department alerts can freeze refund processing.

Bottom line?

Getting an Indian tax refund while living abroad doesn’t have to be stressful. Double check your bank details, ITR form, e‑verification status, income sources, and deductions—and don’t miss the portal alerts. File right, file early—and your refund is more likely to land smoothly.

Justin VargheseYour Money Editor

Justin is a personal finance author and seasoned business journalist with over a decade of experience. He makes it his mission to break down complex financial topics and make them clear, relatable, and relevant—helping everyday readers navigate today’s economy with confidence. Before returning to his Middle Eastern roots, where he was born and raised, Justin worked as a Business Correspondent at Reuters, reporting on equities and economic trends across both the Middle East and Asia-Pacific regions.