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My cousin has worked in Sharjah for eleven years. Every month, on the first Friday after salary day, he used to stand in the same queue at the same exchange house near his flat, send the same amount home, and come back with a paper slip he never read.
One day his younger colleague, who’d just arrived from Kerala, asked him how much his family actually received. He didn’t know exactly. So they compared. Same amount sent, same day. The colleague’s family got almost ₹2,000 more, because he’d used an app with a better exchange rate.
“₹2,000 a month,” my cousin told me later, shaking his head. “For eleven years.”
That’s about ₹2.6 lakh, quietly lost to a slightly worse exchange rate. Not to fraud. Not to bad luck. Just to habit.
If you’re one of the millions of Indians working in the UAE, this guide is for you. We’ll look at every way to send money home, what each one really costs (hint: it’s not the fee you see), how to choose the right account in India, what’s taxable and what isn’t, and the mistakes that cost NRIs the most.
The hidden cost nobody shows you upfront
Most people compare transfer services by the fee. “This one charges AED 10, that one charges AED 25.” That’s only half the story, and usually the smaller half.
The bigger cost is hidden inside the exchange rate.
Every currency pair has a real market rate, often called the mid-market rate. It’s the rate you see when you search “AED to INR” on Google. Most banks and exchange houses don’t give you this rate. They give you a slightly worse one and keep the difference. That difference is called the markup or margin.
A markup of 1% doesn’t sound like much. But on AED 5,000 a month, it’s roughly ₹1,200 every single month that your family never sees. Over a year, that’s ₹14,000 or more.
So the only number that really matters is this: how many rupees will land in the account in India? Always compare that, not the fee.
What AED 5,000 actually becomes, by method
Let’s make it real. Suppose the mid-market rate is ₹24 per dirham (an example rate to keep the maths simple, check today’s actual rate before you send). In a perfect world, AED 5,000 would become ₹1,20,000. Here’s roughly what typical options might deliver:
| Method | Typical fee | Typical rate markup | Family receives (approx.) |
|---|---|---|---|
| Bank SWIFT transfer | AED 25 to 100 | 1% to 2% | ₹1,17,000 |
| Exchange house (counter) | AED 15 to 50 | 0.5% to 2% | ₹1,18,100 |
| Exchange house app | AED 0 to 25 | About 1% | ₹1,18,500 |
| Low-markup transfer app | AED 10 to 20 | Under 0.5% | ₹1,19,200 |
(Illustrative only. Fees and markups change often and differ by provider, amount and promotion. Always check the final INR amount in the app before you confirm.)
The gap between the worst and best option here is over ₹2,000 on a single transfer. That’s my cousin’s story, in one table.
The four ways to send money from the UAE
1. Bank transfer from your UAE bank
Most UAE banks let you send money to India through their app or net banking. Some big banks have their own fast remittance services to Indian banks, which can be quick and fairly priced. Others use the regular SWIFT network, which tends to be slower and pricier.
Good for: people who want everything in one place, larger transfers, and when your bank runs a zero-fee offer.
Watch out for: fees that can reach AED 50 to 100 per transfer, and exchange rates that are often not the best. If you use your bank, check whether it has a dedicated India remittance product rather than a standard international transfer.
2. Exchange houses (Al Ansari, LuLu Exchange, Al Fardan and others)
This is how most Indians in the UAE have always sent money. There’s a branch in every mall and every neighbourhood, staff often speak Malayalam, Hindi or Tamil, and you can pay in cash.
Today almost all big exchange houses also have apps, and the app rates and fees are often better than at the counter.
Good for: cash senders, people without a UAE bank account, and those who like a receipt and a person to talk to.
Watch out for: the counter rate is often worse than the app rate at the same company. Ask, or check the app before you queue.
3. Online transfer apps (Wise, Remitly and similar)
Newer app-based services usually compete hard on rates. Some use the mid-market rate with a small, clearly shown fee. Others charge a small markup but deliver within minutes to any Indian bank account, often through IMPS or UPI rails.
Good for: regular monthly transfers from a UAE bank account or card, and people who want to see exactly what the family will receive before paying.
Watch out for: paying by credit card, which can add extra charges or be treated as a cash advance by your card issuer. Pay from your bank account or debit card instead. And make sure the service is licensed to operate in the UAE.
4. UPI with your NRE or NRO account
Here’s something many NRIs don’t know. India’s NPCI now allows NRIs in several countries, including the UAE, to use UPI with their international mobile number, as long as it’s linked to their NRE or NRO account in India.
This isn’t a way to send money from the UAE. It’s a way to use the money already in your Indian NRE or NRO account. Once your salary money reaches your NRE account, you can pay your parents’ electricity bill, send money to your brother’s savings account, or pay a school fee instantly through UPI, without needing an Indian SIM.
To set it up, ask your Indian bank to register your UAE mobile number against your NRE or NRO account, then add it to a UPI app that supports NRI accounts. A few limits apply, for example UPI transfers from one NRE/NRO account to another NRE/NRO account aren’t allowed, so check your bank’s rules.
And once you’re using UPI, please read our guide to UPI frauds and how to avoid them. Families of NRIs are a common target for “your son is in trouble, send money now” calls.
Which account should the money go to in India?
This is the question that confuses most new NRIs, and the answer saves real money.
NRE account (Non-Resident External)
- For money you earn abroad and send to India.
- Interest is tax-free in India.
- The money is fully repatriable: you can send it back to the UAE anytime, principal and interest.
- Held in rupees, so its value moves with the rupee.
NRO account (Non-Resident Ordinary)
- For money you earn in India: rent from a flat, dividends, pension, or an old savings balance.
- Interest is taxable in India, and the bank deducts TDS.
- Sending money back abroad from NRO has limits and paperwork.
The simple rule: your UAE salary should go to your NRE account. Your Indian income goes to your NRO account.
Many NRIs make one mistake here: after moving abroad, they keep using their old Indian resident savings account. Once you become an NRI, you’re required under FEMA rules to inform your bank and convert or redesignate that account to NRO. Talk to your bank about this. It’s usually a simple form.
Sending directly to family
You can also send money directly to your parents’ or spouse’s regular savings account in India. That’s completely normal for family support. Just remember that once the money is in their account, it’s their money in the eyes of the law, and any interest it earns there is taxable for them if their income is above the basic limit.
Is the money taxed? (The short answer most NRIs want)
For most NRIs in the UAE, the money you send home is not taxed when it arrives. A few clear points:
- Your UAE salary isn’t taxed in India if you qualify as a non-resident for tax purposes. The UAE doesn’t have personal income tax on salaries either.
- Money sent to your own NRE account isn’t income. It’s your own money moving. And interest on NRE deposits is tax-free in India.
- Money sent to close relatives like parents, spouse, siblings and children is treated as a gift from a relative, which is tax-free for them, with no upper limit.
- Money gifted to non-relatives, like a friend or a distant cousin, can become taxable for the person who receives it if the total gifts they get in a year are above ₹50,000.
- What the family earns from the money (interest, rent, gains on investments) can be taxable for them.
Your tax residency depends on how many days you spend in India and other conditions, which have become more detailed in recent years. If you visit India often or have significant Indian income, it’s worth a quick check with a CA who works with NRIs. Official information is on the Income Tax Department website.
When is the best time to send?
The UAE dirham is pegged to the US dollar. So the AED to INR rate mostly moves with the dollar-rupee rate. When the rupee weakens against the dollar, you get more rupees for your dirhams.
Nobody can predict this consistently, so don’t stress about timing every month. But two habits help:
- Set a rate alert in your transfer app. If the rate hits a level you like, you’ll know.
- For big one-time amounts (a home down payment, a wedding), you can split the transfer over a few weeks rather than sending it all on one day.
For regular monthly support to family, consistency matters more than timing. Send on the same day every month and spend your energy on getting a good rate and low fees instead.
Mistakes that cost NRIs the most
Comparing fees instead of the final amount. A “zero fee” transfer with a 2% markup costs more than a AED 15 fee with a 0.4% markup. Always compare the rupees received.
Using hawala or “informal” agents. Unofficial money transfers are illegal in India under FEMA and are tightly regulated in the UAE. The rate may look better, but there’s no protection if money disappears, and accounts receiving such money can be frozen. Always use banks, licensed exchange houses or licensed apps. You can check whether a company is licensed on the Central Bank of the UAE website.
Keeping a resident savings account after becoming an NRI. Convert it to NRO and open an NRE account for your foreign earnings.
Sending everything to family, saving nothing for yourself. Gulf jobs can end suddenly. Keep an emergency fund of at least six months of expenses, partly in the UAE and partly in your NRE account. Here’s why the emergency fund comes first.
Letting money sit idle in India. Money in an NRE savings account earns very little. NRE fixed deposits pay more and the interest stays tax-free. You can check FD growth with the Arocol FD calculator.
Falling for “better rate” offers on WhatsApp. Strangers offering a special rate through a personal account are almost always scams. If it’s not a licensed company’s official app or branch, don’t send.
What to do with the money once it reaches India
Sending money home is step one. Making it grow is step two, and most NRIs never get there.
A simple structure that works for many Gulf NRIs:
- Family support: a fixed monthly amount to parents, sent on the same day each month.
- Emergency fund: six months of your own expenses, in an NRE FD or sweep-in account.
- Goals in India: a home, children’s education, retirement back home. These need long-term investing, not just savings accounts. Our guides on building a child’s education fund and retirement planning explain how to think about these goals.
NRIs in the UAE can invest in Indian mutual funds through their NRE or NRO accounts, after completing NRI KYC. Rules differ for NRIs in some countries, especially the US and Canada, but UAE residents generally have access to most fund houses. If you’re sending a fixed amount each month, the ideas in how to invest ₹10,000 a month apply to you too. Got a bonus or end-of-service gratuity to send home? Read how to invest a lump sum.
And if you’re tempted to buy gold in Dubai for family, read our gold buying guide first, and check India’s customs allowance before you fly.
Books worth reading for NRIs
A good money book is the cheapest financial advice you’ll ever get. Three I’d recommend:
- Let’s Talk Money by Monika Halan: practical money organisation for Indian families, very useful for planning what to do with money sent home.
- The Psychology of Money by Morgan Housel: about saving, patience and not upgrading your lifestyle too fast.
- NRI guides to investing and tax in India: a few good books cover NRE/NRO accounts, FEMA and tax in detail.
Frequently asked questions
What is the cheapest way to send money from UAE to India?
Usually a low-markup online transfer app or an exchange house’s own app, rather than a bank SWIFT transfer or an exchange house counter. But offers change constantly. Before each transfer, compare the final rupee amount in two or three apps.
Is there a limit on how much I can send from UAE to India?
India doesn’t limit how much you can receive from abroad for family support or into your NRE account. UAE banks and exchange houses may have their own per-transaction or daily limits, and large transfers may need source-of-funds documents.
How long does a transfer take?
App and exchange house transfers to Indian bank accounts often arrive within minutes to a few hours. SWIFT transfers can take one to three working days.
Do my parents have to pay tax on money I send them?
No. Money given to parents and other close relatives is treated as a gift from a relative and is tax-free for them. Interest or income they earn from it may be taxable if their total income is above the basic limit.
Should I send to my NRE account or directly to my parents?
Both are fine. Send to your NRE account for your own savings and investments. Send directly to parents for their monthly expenses. Many NRIs do both.
Is hawala legal?
No. Informal hawala transfers are illegal in India and risky. Always use licensed channels.
Before you send this month
Here’s a quick five-minute check:
- Open two or three apps and compare the final rupee amount for the same transfer.
- Make sure the money goes to your NRE account (your savings) or your family’s account (their expenses).
- Use only a licensed bank, exchange house or app.
- Set a rate alert for next month.
- Put a part of this month’s transfer towards your own goals, not just expenses.
My cousin, by the way, switched apps the next month. He calls it his “₹2,000 salary hike”. He also opened an NRE FD for the first time in eleven years. Better late than never.
Recommended reads
- UPI and Online Fraud in India: How to Keep Your Money Safe
- How to Invest ₹10,000 a Month in India: Beginner Plan
- Dhanteras Gold Guide: Jewellery vs Coins vs ETF vs Digital
- Emergency Fund in India: How Much You Need and Where to Keep It
- How to Open a Demat Account in India: A Beginner’s Guide
This article is for general information only and isn’t financial, tax or legal advice. Fees, exchange rates, FEMA rules and tax laws change often. Please check the latest details with your bank, a licensed remittance provider, or a CA who works with NRIs before making decisions.
