Indian buyers who used international credit cards (ICCs) to pay for Dubai property purchases are now under regulatory scrutiny, facing legal complications and potential penalties under Indian financial laws.
The quick-payment option—via payment links provided by overseas developers or in-person card swiping during UAE visits—offered convenience, but ran afoul of the Reserve Bank of India (RBI) regulations. ICCs are permitted only for current account transactions, such as travel or digital purchases—not capital account transactions like overseas property purchases .
Regulators argue these transactions bypassed the RBI’s Liberalised Remittance Scheme (LRS), which permits annual outward remittances up to USD 250,000 per person for capital expenditures like real estate—provided the funds go through specified banking channels.
To regularise the situation, buyers are attempting to cancel their ICC payments and remit the amounts properly via LRS channels. Some are seeking refunds from developers, while others may face enforcement actions. Experts suggest that applying for compound penalties with RBI might mitigate repercussions, but failure to comply could lead to tax and money laundering charges, and enforcement action under FEMA or PMLA.
Indian authorities, including the Income Tax department and Enforcement Directorate, are increasingly vigilant. The lack of bank trail has triggered summons and detailed investigations, especially in cases involving cryptocurrency payments or informal fund routes. What once seemed seamless may now turn into a regulatory headache for many buyers
