- Raj Thackeray criticised actors Vivek Oberoi and R Madhavan for living in Dubai despite praising PM Modi
- Around 4.3 to 4.4 million Indians live in the UAE, comprising 35% to 38% of its population
- Dubai offers no personal income tax, unlike India’s progressive tax rates exceeding 40% for the wealthy
Why are wealthy Indians increasingly choosing Dubai? Raj Thackeray has brought that question into focus by targeting R Madhavan and Vivek Oberoi over their reported decision to live there despite publicly praising Prime Minister Narendra Modi and India's development.
Speaking at an event organised by the Maharashtra Navnirman Vidyarthi Sena in Mumbai, the MNS chief questioned the apparent contradiction.
"Vivek Oberoi, who made a film on Modi and played Modi's role in it, has also gone to live in Dubai," Thackeray said, referring to the 2019 biopic PM Narendra Modi.
"R Madhavan, who praised PM Modi, where does he live? He lives in Dubai. So if you love India so much, if you love PM Modi, if you believe that PM Modi is developing India, then why are they living in a foreign land?"
Neither actor has publicly responded to the remarks.
The question, however, goes beyond two celebrities. An estimated 4.3 million to 4.4 million Indians live in the UAE, making up roughly 35% to 38% of its population. More than half are believed to be based in Dubai.
Indians form the backbone of the UAE's workforce. They work across construction, transport, retail and hospitality, as well as medicine, engineering, banking, technology and corporate leadership. The Indian population in the UAE has nearly doubled from around 2.2 million a little over a decade ago.
For affluent Indians, Dubai's appeal begins with tax.
The UAE does not impose personal income tax on salaries, wages or bonuses. There is no tax deducted at source on employment income and no annual personal income-tax return for most salaried residents. Expatriates generally do not make mandatory social-security contributions either.
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India has a progressive personal income-tax structure. High earners can face effective rates of around 26% to 30%, while surcharge and cess can push the top effective rate for the very wealthy beyond 40%.
High earners must also manage annual returns, advance tax payments and TDS reconciliation. Salaried employees may have professional tax and mandatory Employees' Provident Fund contributions. EPF is a retirement saving rather than a tax, but it still reduces immediate take-home pay.
The salary difference can make the move even more lucrative. Comparative analyses suggest that senior jobs in finance, technology, construction and healthcare can pay two to three times the salaries offered for similar roles in India.
One comparison estimates that a senior software engineer earning around $50,000 annually in Bengaluru could command between $120,000 and $150,000 in Dubai. With no UAE personal income tax, most of that salary remains with the employee, before insurance, housing and other costs.
Some NRI-focused analyses estimate that the combination of higher salaries and zero income tax can produce a 30% to 40% increase in net take-home pay compared with remaining in India.
The tax advantage is not limited to salaries. The UAE generally does not tax individuals on capital gains, dividends, interest or rental income earned in a personal capacity. It has no federal wealth or inheritance tax.
India taxes capital gains and imposes stamp duties and transaction charges on property and securities. These costs can reduce returns for investors managing large portfolios.
An Indian who qualifies as a non-resident is generally taxed in India on income received or generated in India. Salary earned and received for employment in Dubai may remain outside the Indian tax net, subject to residential status and other applicable conditions. Since the UAE does not levy personal income tax, that salary can effectively remain untaxed.
Dubai is not completely tax-free. The UAE imposes 5% VAT on most goods and services. Businesses can face 9% federal corporate tax on taxable profits above the prescribed threshold. Residents also pay steep rents, school fees, healthcare expenses, municipality charges and property service fees.
Yet Dubai offers wealthy Indians zero tax on personal income, higher salaries, long-term residency options, low crime and modern infrastructure. It is also only three to four hours from several Indian cities, with Indian schools, restaurants, festivals and business networks already firmly established.
