How to Transfer Funds from India for Property Purchase in Dubai

Before you transfer money from India to Dubai to buy a property, it is very important to understand the legal rules that apply. The Indian government has strict guidelines on how and when Indian citizens can send money abroad. These rules are mainly governed by two key authorities: FEMA and the RBI. Let’s break them down one by one in a simple way.

A. What is FEMA? (Foreign Exchange Management Act)

FEMA is a law created by the Government of India to regulate all foreign currency transactions. It is valid for both money coming into India or going out of India. When it comes to sending money abroad, FEMA allows Indian residents to do so, but only for certain approved purposes. One such approved reason is buying property abroad, such as real estate in Dubai.

Note: FEMA doesn’t work alone. It includes a specific rule for sending money abroad, which is known as the Liberalised Remittance Scheme, or LRS.

B. What is LRS? (Liberalised Remittance Scheme)

The Liberalised Remittance Scheme (LRS) is a framework that allows resident Indians to send a certain amount of money abroad every financial year for personal, investment, or educational purposes. Under LRS, an individual is allowed to send up to USD 250,000 per financial year (April-March) from India to any other country. It includes the UAE for some legal activities like:

• Buying residential or commercial property
• Investing in foreign stocks or bonds
• Paying for education or medical expenses
• Gifting money to relatives abroad

Note: So, if you want to buy a property in Dubai, you can send up to $250,000 (roughly ₹2 crore) in one financial year under this scheme.

Some Facts About LRS:

Feature	Details
Annual Limit (per person)	USD 250,000
Eligible Users	Resident individuals
Purpose Allowed	Property purchase, investment, education, etc.
Joint Remittance Option	Yes (e.g., husband + wife = $500,000)
Mode of Transfer	Bank transfer via NRE/NRO

Example: A couple can jointly transfer $500,000 to Dubai to buy a property together.

C. What Are the RBI Guidelines?

The Reserve Bank of India (RBI) is the top authority that manages India’s financial system, including money transfers abroad. The RBI permits fund transfers under LRS, but only if you follow certain conditions and submit proper documents. Here’s what you need to do:

1. PAN (Permanent Account Number)

You must have a valid PAN card. This is needed for tracking your tax records and ensuring your transactions are legal.

2. KYC (Know Your Customer)

Before you can transfer money, your bank will ask you to complete KYC. This includes verifying your identity, address, and source of funds. Typically, you’ll need to provide documents like:

• Passport copy
• Aadhaar or utility bill for address proof
• Income proof or bank statement

3. Form A2

This is a standard form you’ll need to fill out and submit to your bank. It declares that you are sending money abroad for a permitted purpose (in this case, property purchase) and that you are complying with FEMA and RBI rules.

4. Transfer Through Authorized Channels

You cannot simply transfer money abroad using any method. The RBI allows fund transfers only through:

• Authorized Indian banks
• RBI-approved money changers or remittance services

Note: If you are trying to send money through unauthorised channels (like hawala or informal agents), it is illegal and could lead to serious penalties.

Table To Summarise:

Requirement	Details
Governing Law	FEMA (Foreign Exchange Management Act)
Main Scheme	LRS (Liberalised Remittance Scheme)
Yearly Limit (per person)	USD 250,000
Approved Purpose	Property purchase, education, investment, etc.
Documents Required	PAN, KYC, Form A2
Transfer Channel	Authorized Indian banks or RBI-approved agents

An Example to Make It Simple:

Let’s say Mr. Arjun, an Indian living in Mumbai, wants to invest in an apartment in Dubai. The property costs AED 1.5 million (around ₹3.4 crore).

In April 2025, Arjun used his NRE account to send $125,000 from India to Dubai through his authorized Indian bank. His wife, who is also eligible under LRS, transfers the remaining $125,000 from her account. Both submit Form A2, their PAN, and complete KYC. Within a few working days, the funds reach the developer’s escrow account in Dubai, and the investment is recorded legally.

Why It’s Important to Follow These Rules:

Following FEMA and RBI guidelines ensures that your fund transfer is:

• Legal and traceable
• Safe from tax scrutiny or penalties
• Recognized in Dubai during property registration or future resale
• Eligible for visa purposes, if applying for the Golden Visa

Note: Ignoring these rules or using shortcuts may lead to blocked transactions, legal action, or your money getting stuck.

In Short:

FEMA and RBI are there to protect your money and ensure the transfer is smooth and transparent. Once you understand the rules, transferring funds from India to Dubai becomes easy and straightforward. Always consult your bank, a certified financial advisor, or a property expert to guide you through the process step-by-step.

Transferring money from India to Dubai to buy a property is a simple process if you follow the correct steps. Here's how it works:

1. Open an NRE or NRO Account

First, make sure you have an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) bank account with an authorized Indian bank. This account will be used to send the money legally under the RBI’s rules.

2. Get the Property Booking Form or Sale Agreement

Once you’ve chosen a property in Dubai, the developer will give you a Property Booking Form or a Sale & Purchase Agreement. This document confirms the price and payment schedule for your property.

3. Submit All Required Documents to Your Bank

To start the fund transfer process, you need to give your Indian bank the following:

• PAN Card: Your Permanent Account Number (mandatory for tax purposes)
• KYC Documents: Proof of your identity and address (passport, utility bill, etc.)
• Form A2: A simple declaration form that states the reason for sending money abroad (in this case, buying property)
• Property Documents: the booking form or sale agreement from the Dubai developer

4. Bank Processes the Transfer

Your bank will now process the transaction in USD (US Dollars) and send the money to the developer’s escrow account in Dubai. This is a secure, government-approved account used for real estate payments.

5. Get a Payment Receipt

After the developer receives the payment, they will issue a payment receipt in your name. This proves that your money has been received and officially booked against the property.

Note: The entire process usually takes 3 to 7 working days, depending on your bank and the currency exchange process.

If you’re an NRI planning to buy a property in Dubai, it’s important to know which bank account to use for transferring your money from India. In most cases, you’ll be using either an NRE or NRO account. Let’s understand the difference between them in simple terms.

A. NRE Account (Non-Resident External)

An NRE account is meant for managing your foreign income—like your salary, business earnings, or savings from outside India.

Key Features:

• The money you deposit in this account is fully repatriable, which means you can easily send it abroad without any limit or restriction.
• The interest earned is completely tax-free in India.
• You can hold the account in Indian Rupees (INR), but the money in it comes from outside India.
• This account is ideal if you are earning abroad and want to invest in Dubai real estate directly from your foreign savings.

Example:

Ravi lives in the UAE and earns in dirhams. He saves some of that money and deposits it in his NRE account in India. Later, when he decides to buy an apartment in Dubai, he uses this NRE account to transfer funds to the developer’s escrow account. Since the money was already in foreign currency, it gets sent easily and without any Indian tax.

B. NRO Account (Non-Resident Ordinary)

An NRO account is used to manage income you earn within India. It includes income such as rent from your Indian property, pension, dividends from Indian stocks, or any other local source.

Key Features:

• You can repatriate (send abroad) up to USD 1 million per financial year from this account, but you will need a chartered accountant’s (CA) certificate to confirm that all taxes are paid.
• The interest earned in this account is taxable in India.
• This account is useful if your Dubai property investment is coming from your Indian income or assets.

Example:

Neha owns a flat in Bengaluru that she rents out. She collects that rent in her NRO account. Now she wants to use this income to invest in a holiday home in Dubai. Since she’s using Indian income, she can repatriate up to $1 million from her NRO account to Dubai, after getting the necessary tax clearance from her CA.

Quick Comparison Table:

Feature	NRE Account	NRO Account
Source of Funds	Earnings from outside India	Income earned in India
Repatriation Limit	No limit (fully repatriable)	Up to $1 million/year (with CA certificate)
Tax on Interest	No (tax-free in India)	Yes (taxable in India)
Ideal Use Case	Buying property using foreign savings	Using Indian income for property investment

Some Extra Tips:

• If your investment funds are coming from your savings or job abroad, use your NRE account for a smoother, tax-free transfer.
• If you plan to use Indian earnings like rent or dividends, go with your NRO account. But, remember, you’ll need some paperwork before sending the money.

When you transfer money from India to Dubai for a property purchase, your Indian Rupees (INR) have to be converted into UAE Dirhams (AED). But in most cases, the money is first converted into US Dollars (USD), and then into AED. This is because USD is the most commonly used currency for international transactions, including real estate deals in Dubai. Here are some key things you should know:

1. INR is Usually Converted via USD

Your bank will typically first convert INR into USD, and then send the payment to the developer&developer'sn Dubai, where it may be received in AED.

Example:

If you’re transferring ₹40 lakhs, the bank might convert it to USD (say at ₹83 per USD), and then convert that USD amount to AED at the current USD-AED exchange rate. So, two exchange rates are involved, and they can affect how much AED actually reaches Dubai.

2. Use Forward Contracts for Large Transfers

If you're planning to transfer a large amount&mdayou'rer a property down payment or iamount, likes a smart idea to use a forward contract.

A forward contract lets you lock in the current exchange rate and use it at a future date. This protects you from losses if the value of the rupee falls later.

Example:

You need to send money in 2 months. Today, 1 USD = ₹83. If you book a forward contract now, and the rupee weakens to ₹85 later, you still get the benefit of the locked-in ₹83 rate. This could save you thousands of rupees on a large transfer.

3. Always Use RBI-Authorized Forex Dealers or Banks

To keep your money safe and your transaction legal, make sure you only use RBI-authorized banks or forex dealers. These are registered and approved to send money abroad under the Liberalised Remittance Scheme (LRS).

Avoid using informal channels or unknown agents, even if they offer better rates. This is so because unapproved transfers can be illegal and risky.

4. Watch INR-AED Exchange Rate Trends

Currency values keep changing every day. The INR-AED exchange rate can go up or down depending on global markets. If you transfer money when the rupee is weaker, you’ll get fewer dirhams in Dubai.

So it’s a good idea to monitor exchange rate trends for a few weeks before you make a large payment. You can also talk to your bank or a currency expert to time your transfer better.

Even a small change in rates can make a big difference if you are transferring large amounts, like ₹40–50 lakhs or more.

INR to AED Exchange Rate Trend (2024-2025):

Month	Exchange Rate (₹ per AED)	Change from Previous Period	Remarks
January 2024	22.35	–	Stable start to the year
March 2024	22.41	+0.27%	Minor fluctuation
May 2024	22.48	+0.31%	INR slightly weakened
July 2024	22.53	+0.22%	Continued upward trend
September 2024	22.61	+0.35%	Market volatility increases
November 2024	22.66	+0.22%	Rupee under mild pressure
January 2025	22.63	-0.13%	INR gains slightly
March 2025	22.68	+0.22%	Balanced forex activity
May 2025	22.70	+0.09%	Stable conversion rate
July 2025	22.72	+0.09%	INR remains relatively steady

Some Extra Tips:

If you’re planning to send a big amount for your Dubai property, always plan your currency conversion in advance. Talk to your bank about locking in the rate, compare exchange rates across RBI-approved dealers, and keep an eye on forex movements.

Once you’ve successfully transferred your money from India to Dubai for a property purchase, a few important steps take place on the UAE side to complete and secure your investment. Let’s break it down:

1. Funds Are Received in the Developer’s Escrow Account

In Dubai, real estate developers are legally required to maintain an escrow account for every off-plan project. This is a secure bank account monitored by the Dubai Land Department (DLD) to protect your money and ensure it’s used only for construction and project development.

Example:

You buy an apartment in an off-plan project like Azizi Riviera. The amount you pay (e.g., AED 200,000) will go into the escrow account assigned specifically for that project. It will not directly go to the developer. This ensures your money is used for that project only.

2. Buyer Receives a Payment Receipt

After the funds are credited to the escrow account, the developer will issue an official payment receipt. This confirms that they have received your payment in AED. This receipt is an important document and should be saved carefully. You’ll need it for further registrations and legal formalities.

3. Submit Documents for Oqood Registration (for Off-Plan Properties)

If you’ve bought an off-plan property, the next step is to register your ownership with the Dubai Land Department through something called an Oqood Certificate. Oqood is a provisional ownership record issued to buyers of under-construction properties. It protects your rights and shows that you are the official buyer of that unit.

Documents usually required for Oqood registration:

• Passport copy
• Payment receipt from the developer
• Sale and Purchase Agreement (SPA)
• Completed registration forms (provided by developer or DLD)

Example:

If you purchased a unit in Sobha Hartland that’s still under construction, the developer will help initiate your Oqood registration after your first or second payment.

4. Later, You May Need to Open a UAE Bank Account

As your property progresses toward handover or if you’re planning to lease it out. In that case you may need to open a UAE bank account. This will help you receive rental income, pay service charges, or handle future installment payments easily.

Common documents needed:

• Passport copy
• UAE Visa (if you have one – it can be a tourist visa, residency visa, or Golden Visa)
• Proof of address in your home country (like a utility bill or bank statement)
• Sale and Purchase Agreement (SPA) signed with the developer

Example:

If you are nearing the handover of a ready-to-move-in apartment in Business Bay, your bank may ask for these documents to activate your local UAE bank account. This helps simplify payment of maintenance fees or collection of rent via direct deposit.

What Taxes or Fees Apply?

The table below shows the comparison of tax and remittances rules in India Vs UAE

Country	Tax/Rule Category	Details
India	TCS on Remittances	5% on remittances above ₹7 lakh/year (with PAN)
	TCS Rate (without PAN or some types)	20% without PAN or for certain investment types
	Foreign Asset Disclosure	Mandatory disclosure of foreign assets in Income Tax Return (ITR)
UAE	Personal Income Tax	No personal income tax
	Capital Gains Tax	No capital gains tax
	Remittance Tax	No remittance tax

Observations from the table:

• In India, remittances above the specified annual threshold are subject to Tax Collected at Source (TCS), with higher rates for those without PAN or for specific investment transactions.
• Disclosure of foreign assets is mandatory in the Indian Income Tax Return (ITR) for residents.
• ln the UAE, there are no personal income taxes, capital gains taxes, or remittance taxes for individuals, making it a tax-friendly destination for expatriates and investors.

If you are planning to send money from India to buy property in Dubai, it’s important to be aware of a few recent rule changes. These updates affect how much tax you pay, which documents are needed, and how easily you can send money abroad.

1. TCS Changes (Tax Collected at Source)

From October 1, 2023, the Indian government made changes to TCS (Tax Collected at Source) under the Liberalised Remittance Scheme (LRS). If you send more than ₹7 lakh in a financial year, a 5% TCS will be applied to the amount above ₹7 lakh.

Example:

If you send ₹20 lakh in a year to buy property in Dubai:

• The first ₹7 lakh has no TCS
• On the remaining ₹13 lakh, 5% TCS is collected which becomes ₹65,000

2. PAN is Now Mandatory

Whether you're sending ₹1 lakh or ₹20 lakh abroad, it is now mandatory to provide your PAN card for all international fund transfers under LRS. This rule helps the Indian government track overseas investments and transactions properly.

Note: So before starting the transfer, make sure your PAN is linked with your bank account and all your KYC is up to date.

3. Golden Visa Eligibility Threshold Remains Unchanged

For those aiming to get the UAE Golden Visa, the property investment threshold remains AED 2 million (about ₹4.5 crore). If your property value crosses this limit, you may qualify for a 10-year residency visa in Dubai. This visa allows you and your family to:

• Live and work in the UAE
• Sponsor dependents
• Enjoy long-term stability in the country

4. Online LRS Transfers Now Available with Some Banks

To make things easier, some Indian banks have started offering online fund transfers under LRS directly through their mobile apps and internet banking platforms. This means you can now:

• Fill and submit Form A2 online
• Upload documents like PAN and KYC digitally
• Track the status of your remittance in real-time

Example:

• ICICI Bank, HDFC Bank, and Axis Bank have integrated this feature into their apps.
• You can now remit money for property investment without visiting a branch.

Buying a property in Dubai is a smart move for investors and homebuyers. The city offers strong returns, a global lifestyle, and long-term visa potential. But the process begins with legally transferring your money from India. With proper planning, documentation, and compliance, fund transfer can be seamless. Always consult with a professional advisor and ensure all steps are in line with both Indian and UAE laws.