Dubai purchases from India: how to transfer money from India to Dubai for property

Buyers in India tend to ask about the building first and the banking second. It is usually the wrong order. The question of how to transfer money from India to Dubai for property has a settled answer, and the sequence in which you work through it decides how clean the purchase looks years later.

The route is the Reserve Bank of India's Liberalised Remittance Scheme. Acquisition of immovable property abroad is a permitted capital account transaction under it, which means a resident individual may fund a Dubai purchase directly from an Indian bank account. The reported ceiling is around USD 250,000 per person per financial year, April to March. A Permanent Account Number is mandatory for every remittance, and your bank will ask you to declare the purpose on Form A2.

How much can a family send in one year?

Each resident individual has their own reported limit of around USD 250,000 per financial year, so a family can fund a larger purchase by remitting separately rather than through one person. For a property, that pooling only holds if those family members are co-owners on the title, because clubbing is not permitted for relatives who hold no interest in the asset.

This is the detail most often missed, and it is the expensive one. A parent or spouse who funds part of the purchase but is left off the title deed creates a mismatch between the Indian remittance record and the Dubai register, and that is considerably harder to correct after transfer than before it. A second constraint sits alongside it: banks in India are not permitted to extend credit facilities to fund a capital account remittance under the scheme, so the money leaving the country has to be your own.

What does the money cost on the way out?

Two charges are worth planning for, and only one of them is a genuine cost. Tax Collected at Source is reported at nil up to around 10 lakh rupees of remittance in a financial year, and around 20 per cent above that for purposes other than education and medical treatment.

It is an advance tax collected against your Permanent Account Number rather than a levy on the purchase. It appears in Form 26AS and is credited against your income tax liability for the year, with any excess refunded when you file your return. The effect on cash flow is real and should be funded; the tax itself, for most buyers, is not.

At the Dubai end, registration with the Dubai Land Department is reported at around 4 per cent of the purchase price plus a small administrative fee, with a trustee office charge of around AED 4,000 plus VAT. Those are transaction costs rather than remittance costs, but they belong in the same funding plan, and they are far easier to absorb when they are budgeted from the start than when they surface on transfer day.

Oakbrick's view

Sequence beats speed. Confirm with your bank what it will want to see before you sign anything in Dubai, settle the names on the title so they match the people whose annual limits are being used, and keep the Form A2 declarations, the bank advices and the title deed together as a single file from the outset.

A purchase that is clean on paper in both countries is worth more than a few days saved. Your bank and your chartered accountant are the right people to confirm the remittance and tax detail for your own circumstances. We can help with the property side and the order of events around it, and we set out the market context for these purchases on our Dubai market page.

Source: Dubai Land Department and published market reports.