India nudges UAE property owners to review tax disclosures before Dec 31st

Indian citizens who own a home or commercial property in the UAE should check their email and the Indian tax portal. India’s Income Tax Department has begun contacting selected taxpayers about the reporting of overseas property and related income.

The Foreign Assets of Small Taxpayers–Disclosure Scheme (FAST-DS) opened on 16th August 2026. By late October, around 1,100 taxpayers had applied, according to the Finance Ministry.

The deadline for filing a declaration is 31st December 2026. Eligible taxpayers who missed required disclosures now have a limited period to review their records and address reporting gaps. The amount payable depends on the type of disclosure and the source of the money used to buy the asset.

Key takeaways

• FAST-DS declarations close on 31st December 2026.
• Route one applies to undisclosed foreign assets or taxable foreign income, capped at ₹1 crore (approximately AED 386,000).
• Route two applies to foreign assets worth ₹5 crore or less (approximately AED 1.93 million), subject to residency and funding rules.
• To qualify under the scheme, taxpayers must meet the Form 1, payment, and Form 3 deadlines.

Why is India contacting UAE property owners?

If taxpayers have received a message or notice from India’s tax department, it is important to remember that an alert does not automatically indicate wrongdoing or mean that a tax payment is due. Start by checking the details carefully, reviewing the relevant records and confirming any required action through official channels.

India receives financial account information through international exchange arrangements such as the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA). Tax officials use these details to compare foreign asset reporting with Indian tax returns.

The department has asked selected taxpayers to review foreign asset information linked to their PAN for 2022, 2023 and 2024 on India’s income tax e-filing portal. The portal displays information received through the CRS and FATCA reporting systems, but it does not show every detail held by the department. Officials also receive information through other international arrangements and sources.

How does the FAST-DS scheme work?

The Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS) provides eligible taxpayers with a one-time opportunity to declare overseas assets or correct omissions in previous Indian tax returns. The scheme has two categories, with eligibility depending on how the assets were funded and whether they were previously reported.

Route one: Undisclosed assets or income up to ₹1 crore

Route one covers foreign assets where the source of investment cannot be satisfactorily explained, or foreign income that was taxable in India but was not reported. The combined value of eligible undisclosed foreign assets, valued as of 31 March 2026, and relevant undisclosed foreign income must not exceed ₹1 crore.

Taxpayers pay 30% of the declared asset value or relevant income, plus a second amount equal to that tax. The total payable is 60% of the relevant value or income, subject to the scheme rules.

Route two: Assets worth up to ₹5 crore

The second route applies to foreign assets bought with income earned abroad while the owner was a non-resident, or with income already taxed in India. In both cases, the asset must have been omitted from the relevant foreign-asset section of the Indian tax return. When the purchase used income earned while the owner was a non-resident, the omission must relate to a tax return filed after the owner became an Indian tax resident.

The combined value of eligible foreign assets must be ₹5 crore or less as of 31st March 2026. Applicants in this category pay a fixed fee of ₹1 lakh (approximately AED 3,860).

Eligibility depends on Indian tax residency during the relevant year, the source of the purchase money and the asset’s reporting history. The relevant year is the year the foreign income arose or the asset was acquired. Current residency status alone is insufficient to confirm eligibility under the scheme.

FAST-DS excludes assets or income linked to proceeds of crime when proceedings under the Prevention of Money Laundering Act are pending or have begun. The scheme also excludes assets or income linked to an assessment year whose proceedings have already concluded under the Black Money Act.

What should owners do before the deadline?

Indian taxpayers who own property in Dubai should take these steps before the FAST-DS deadline.

Review earlier tax returns

Use the e-filing portal to download foreign asset information linked to the PAN for 2022, 2023 and 2024. Match those entries against the foreign asset schedules in relevant Indian returns. Check whether rental income appears in the required sections.

Gather the property records

Ask the property manager or real estate agency in Dubai for the sale agreement, title deed and available rental records. Obtain bank statements and payment receipts directly from the bank.

Speak to an Indian tax adviser

An Indian tax adviser needs the acquisition year, source of funds and tax residency during that year to identify the right category. Take earlier tax returns and property records to the appointment.

Follow the form deadlines

Submit Form 1 by 31 December 2026. The department issues Form 2 within one month after the end of the month in which Form 1 was filed.

Payment is due within two months after the end of the month in which Form 2 is received. Late payment incurs interest at 1% per month or part of a month. The rules allow an additional period of up to two months, subject to interest. If the taxpayer doesn't pay within the full four-month period, they lose the scheme benefit for that declaration.

Submit Form 3 and proof of payment within four months after the end of the month in which Form 2 is issued. The department then verifies the payment and issues Form 4.

What Indian owners of UAE property should do next?

A Dubai home bought from salary savings has a different paper trail from one inherited from family. The purchase history and relevant Indian tax return determine which FAST-DS category applies. If betterhomes handled the transaction, ask the real estate team for any missing records.

Before filing a declaration, ask a qualified Indian tax adviser to review the purchase documents, source of funds and relevant tax returns. These details will clarify which category fits the case and which steps to take next.

For updates on property regulations and market changes that affect UAE investors, read the latest Dubai real estate news from betterhomes.