How to Move Money from India to Dubai to Buy Property

Buying property in Dubai from India is legal and well-trodden, but the money has to move through a regulated channel before it can be legal. Resident Indians remit under the Reserve Bank of India's Liberalised Remittance Scheme (LRS); NRIs typically route funds from NRE or FCNR accounts under a different, less restrictive framework. Getting the mechanics wrong — the wrong purpose code, an undocumented source of funds, an unclaimed TCS credit — causes more delays and disputes than any part of the actual property transaction. This is the process as it currently stands.

The LRS Limit and How It Works

DataAnnual limit: Every resident Indian individual can remit up to USD 250,000 (or equivalent) abroad per financial year under the RBI's Liberalised Remittance Scheme — a limit that has held since 2015 and covers property purchase, investments, gifts, travel, education, and maintenance of relatives combined, not property alone.

That means a resident buying a Dubai apartment isn't allocated a separate $250,000 "property budget" — any other remittances made in the same financial year (a child's tuition abroad, an overseas investment, a family gift) draw down the same cap.

Market claimThe misconception: that a family's LRS limit is a single pooled $250,000. It isn't — each adult family member has their own individual $250,000 annual cap. A family of three can combine up to $750,000 in a single year toward one purchase, and more across multiple financial years, but every contributor must be recorded as a co-owner on the property title. Remitting under the property purpose code (S0005) and then transferring beneficial ownership to a relative who didn't remit the funds risks the transaction being reclassified as a gift, which carries its own tax and compliance consequences.

Each remittance requires two documents at the bank: Form A2, the RBI-prescribed application-cum-declaration confirming the purpose code, beneficiary details, and that the remittance stays within the annual LRS ceiling; and an LRS declaration confirming the funds are the remitter's own, from a legitimate source, and that the cumulative LRS limit for the year hasn't been exceeded across all banks (RBI routes this through the PAN-linked LRS reporting system, so banks can see remittances made elsewhere).

TCS on Your Remittance

DataCurrent rate: Outward remittances under LRS for property purchase and general investment purposes attract Tax Collected at Source (TCS) at 20% on the amount above ₹10 lakh in a financial year — the first ₹10 lakh remitted is TCS-free (Section 206C(1G), effective structure as of FY 2025-26).

This threshold moved recently: the rate was raised to 20% (from 5%) for non-education/medical remittances effective October 2023, and the nil-TCS threshold itself was raised from ₹7 lakh to ₹10 lakh effective April 1, 2025 in Budget 2025. Budget 2026 cut TCS further, but only for overseas tour packages and education/medical remittances (down to 2%) — property purchase and general investment remittances were left at the existing 20% above ₹10 lakh.

In practice: on a ₹1 crore remittance for a Dubai property purchase, the first ₹10 lakh is TCS-free and the remaining ₹90 lakh attracts 20% TCS — roughly ₹18 lakh collected upfront by the bank and deposited against your PAN.

Market claimThe misconception: that TCS is an extra 20% cost on top of the purchase price. It isn't a tax on the purchase — it's a prepaid tax credit. It appears in your Form 26AS/AIS against your PAN and is claimed back when you file your ITR, either adjusted against your total tax liability for the year or refunded if it exceeds that liability. Salaried taxpayers can also have TCS credit adjusted against monthly TDS on salary by submitting Form 12BAA to their employer, rather than waiting for the annual refund. It is a genuine cash-flow cost — the money is locked up until the credit is claimed — but not a final cost.

Step-by-Step: Moving the Money

The remittance itself is a standard AD (Authorized Dealer) bank transaction, but property purchases attract more documentation scrutiny than a routine LRS transfer.

1. Choose an AD bank. Only RBI-authorized dealer banks — most scheduled commercial banks — can process LRS remittances. Using your existing savings account bank is usually fastest since KYC is already on file.
2. Complete Form A2 with the correct purpose code. Purpose code S0005 (immovable property purchase) should be used specifically, not a general "investment" or "gift" code — misclassifying the purpose complicates both the bank's compliance review and any later FEMA scrutiny.
3. Submit source-of-funds documentation. Banks typically require salary slips or ITRs for the past 2-3 years, bank statements showing fund accumulation, and — for a property purchase specifically — a copy of the sale/purchase agreement with the Dubai developer or seller, and sometimes a developer NOC or booking confirmation, before releasing funds against the S0005 code.
4. File Form 15CA (and 15CB where required). Form 15CA is an income-tax filing confirming the tax character of the remittance; for remittances that constitute taxable payments to a non-resident above an aggregate of ₹5 lakh in the financial year, a chartered accountant's certificate (Form 15CB) is also required before the bank will release funds. Many personal LRS remittances of already-taxed savings fall under exempted categories that need only a simpler declaration — confirm the specific requirement with your bank, since practice varies.
5. Bank processes TCS, conversion, and SWIFT transfer. TCS is deducted at source, the rupee amount is converted to AED (or USD, depending on the beneficiary account) at the bank's card/TT rate, and the balance is wired via SWIFT to the developer's or seller's escrow account.
6. Processing timeline. A straightforward, fully-documented remittance typically clears in 2-5 working days. Large sums, first-time senders at a given bank, or incomplete documentation routinely push this to two to three weeks as the bank's compliance desk requests clarification.

NRE/FCNR Route for NRIs

DataNRIs are not LRS-constrained: the USD 250,000 LRS ceiling and its associated TCS (Section 206C(1G)) apply to remittances by resident Indians. NRIs remitting funds already held in NRE or FCNR accounts are outside the LRS framework entirely — those funds are fully and freely repatriable with no RBI-imposed ceiling, and the transfer is not subject to LRS-linked TCS.

This makes the NRE/FCNR route materially simpler for NRIs funding a Dubai purchase: no purpose-code cap to track, no annual $250,000 ceiling to plan around across family members, and no TCS deduction to later reclaim. The practical requirement is simply that the funds genuinely originate from the NRE/FCNR account and the standard FEMA remittance declaration and beneficiary KYC are completed with the bank.

NRIs remitting instead from an NRO account (where rental income, dividends, or other India-sourced earnings typically sit) fall under a separate facility — up to USD 1 million per financial year, subject to Form 15CA/15CB and proof that applicable Indian tax has been paid on the funds before repatriation.

Common Friction Points

• Compliance and KYC delays. The single biggest source of delay is incomplete source-of-funds documentation on the first large remittance with a given bank — build in buffer time rather than remitting against a tight developer payment deadline.
• Documentation banks typically ask for: ITRs/salary slips (source of funds), the signed sale/purchase agreement, developer NOC or booking form, and — for larger or repeat remittances — a written explanation of the fund's accumulation history.
• Forex margin on large sums. Bank card/TT rates on INR-AED or INR-USD conversion carry a spread over the interbank rate; for remittances in the tens of lakhs or more, comparing your bank's rate against a specialist forex remitter (some AD-licensed) before locking the rate can meaningfully reduce the effective cost.
• Reconciling multiple remittances against the LRS limit. If a resident individual is splitting a purchase across two or three tranches within a financial year, banks cross-check cumulative LRS usage against your PAN across all AD banks — keep a running tally to avoid a remittance being rejected for exceeding the annual cap.
• TCS credit going unclaimed. Because TCS is deducted upfront and only recovered at ITR filing (or via Form 12BAA for salaried employees), it's a real, if temporary, cash-flow cost that buyers should factor into how much liquidity they need on remittance day — separate from the credit they'll eventually recover.