Overseas buyers & visas
Indian residents buying in Dubai: our LRS, TCS and reporting checklist
Most of the buyers who contact us from India already know they want a Dubai home. What they often haven't mapped out is the Indian side: how money leaves the country, what the bank holds back, and what has to be declared afterwards. This note walks through the points we raise with every India-resident client before a booking form is signed.
One scope note first. Everything below applies to people who are resident in India. If you are an NRI living and working abroad, a separate and simpler set of rules covers you.
Why the currency matters to Indian buyers
The UAE dirham is pegged to the US dollar at 3.6725 dirhams per dollar. The rupee floats. When the rupee loses ground against the dollar, a property priced in dirhams becomes more valuable when counted in rupees, even with no change to its dirham price.
| Measure | Jan 2023 | 14 Oct 2026 |
|---|---|---|
| ₹ for each AED 1 | roughly 22.5 | roughly 25.9 |
| Value of an AED 1M flat | roughly ₹2.25 cr | roughly ₹2.59 cr |
On those numbers, a flat whose dirham price stayed flat gained roughly ₹34 lakh in rupee terms, close to 15%, purely from the exchange rate. Dirham rent converts into more rupees too. Across twenty years the rupee has slid from around 45 to around 95 against the dollar.
We always add the other half of that picture. Currencies swing in both directions and history is no forecast. India taxes the whole gain when you sell, the currency element included, and Dubai purchase costs reduce whatever return you make.
Check 1: how much your family can send
Under LRS, an authorised Indian bank can remit up to USD 250,000 per person in each financial year (April to March), and buying property overseas is a permitted purpose.
Limits can be combined across the family. Every member, children included through a parent, has a separate allowance, so four people could remit as much as USD 1 million within one year. The condition we check closely: anyone whose money goes into the purchase must also be named as an owner.
This is one reason off-plan suits many India-based buyers. A payment plan that stretches over several years lets instalments land in different financial years, each with fresh limits.
Check 2: the 20% your bank keeps for a while
Once your total LRS remittances in a financial year pass ₹10 lakh, the bank collects TCS (tax collected at source) at 20% on the excess when the purpose is property or investment.
A worked example: send ₹1 crore in a year for a Dubai flat, and nothing is collected on the first ₹10 lakh, while 20% of the remaining ₹90 lakh, ₹18 lakh, is. So ₹1.18 crore must be available rather than ₹1 crore.
TCS is no extra tax. It is treated as tax already paid, and you recover it by setting it against your income tax or claiming a refund in your return. Until then the money is unavailable, frequently for many months, so we ask clients to budget for it from day one.
The ₹10 lakh threshold has been in place since April 2025. Budget 2026 lowered TCS to 2% from April 2026 for study abroad, medical costs and foreign tour packages. Property and investment were not included and remain at 20%.
Check 3: how you will pay without a Dubai loan
India's foreign exchange law (FEMA) generally prevents a resident from borrowing from an overseas bank to purchase property abroad. In practice, a Dubai mortgage is usually ruled out, and the purchase is funded from your own money sent under LRS.
Staged payments to a developer are normally fine. Where we slow things down is a plan that leaves a large share payable after handover, because that structure can resemble borrowing. Before you commit to one, get a view from your bank in India and a chartered accountant.
Check 4: what you report every year
- Schedule FA. Each foreign property must appear in your income tax return annually, regardless of value. Under the Black Money Act, failing to report can lead to a penalty of ₹10 lakh a year.
- Rent. Income from the Dubai unit counts as Indian income. With no UAE tax on it, so Indian tax applies.
- Sale. Profit is taxable in India and is calculated in rupees, which means currency gains are counted.
Check 5: the Dubai costs still apply
Living in India changes nothing on the Dubai side. You still pay the 4% registration fee plus the usual purchase costs. And holding AED 2 million or more in property may make you eligible for a Golden Visa.
Our short checklist
- Add up your family's LRS allowances and name each sender as an owner.
- Hold extra cash to cover 20% TCS.
- Budget to buy without a Dubai mortgage.
- Get any post-handover plan reviewed by your bank and accountant.
- Declare the property in Schedule FA each year.
How we help
We are a Dubai brokerage, not tax advisers or chartered accountants. What we can do is match payment plans to your remittance timeline, flag schedules that lean heavily on after-handover payments, and make sure the ownership names line up with who is sending funds. For the Indian tax and FEMA side, we will always point you to your bank and a CA.
Sources: Reserve Bank of India, Liberalised Remittance Scheme master direction; Foreign Exchange Management (Borrowing and Lending) Regulations, 2018; Income-tax Act, TCS on LRS (₹10 lakh threshold from 1 April 2025; Budget 2026 changes); Black Money (Undisclosed Foreign Income and Assets) Act, 2015. Rules change, so confirm with your bank and a chartered accountant.
General information, not legal, tax or financial advice. Check current rules with the relevant authority before acting.