Buying Dubai Off-Plan from India: LRS, TCS & the Taxes Nobody Mentions

Yes, a resident Indian can legally buy property in Dubai. The interesting part is how the rules actually fit together — because one of them makes off-plan the natural structure for Indian buyers, and almost nobody explains why.

This guide covers the Indian side properly: the RBI's $250,000 remittance limit and how a payment plan works around it, the 20% TCS that looks like a cost but isn't, the Indian taxes that genuinely apply to a Dubai property, and the disclosure rule with penalties heavy enough that you should never skip it. Then the Dubai side, briefly — the fees and process are the same for every nationality, and they're covered in detail elsewhere on this site.

Can a resident Indian buy in Dubai? Yes — here's the mechanism

Two legal systems have to say yes, and both do.

On the Dubai side, foreign nationals of any country can buy freehold property in Dubai's designated freehold areas — full ownership, title deed in your name, no residency required. Indians have been the largest or near-largest group of foreign buyers in Dubai for years.

On the Indian side, buying property abroad is a permitted transaction under the RBI's Liberalised Remittance Scheme (LRS). The money must leave India through an authorised dealer (AD) bank — your regular bank, with the right form (A2) and purpose code — and stay within the LRS limit. Route money any other way (hawala, cash, a friend's account abroad) and you have a FEMA violation attached to a multi-crore asset. Always the bank route. Always.

The $250,000 LRS limit, plainly

Under LRS, every resident individual can remit up to USD 250,000 per financial year (April to March) for permitted purposes, including property purchase. Three things matter about this number:

• It is per person. A couple has $500,000 of annual capacity; a family of four has $1,000,000 — provided each remitter is a co-owner of the property their money pays for.
• It resets every financial year. April 1 starts a fresh $250,000 for every individual.
• It is a limit on remittance, not on ownership. There is no cap on the value of property you can own abroad — only on how fast money can leave India.

Now look at that structure next to how Dubai off-plan actually works, and something clicks.

Why payment plans fit LRS perfectly

A Dubai off-plan payment plan spreads the price over years of construction-linked instalments. The LRS limit resets every year. Put together: a payment plan converts a purchase that would breach the annual limit into a series of yearly remittances that never do.

Take an AED 2,000,000 apartment — about USD 545,000 (the dirham is pegged to the dollar at 3.6725, which also means your instalment amounts never move against the dollar). Paid at once, that is more than two years of one person's LRS capacity. On a typical 60/40 plan across a three-year build, it looks like this:

One buyer, one salary’s worth of paperwork, and a half-million-dollar Dubai asset acquired without ever touching the ceiling. A ready property at the same price would force either two co-owners or two financial years bridging a seller who probably won't wait. This — not the marketing — is the structural reason off-plan suits Indian resident buyers so well.

The LRS limit resets every April. A payment plan is a remittance schedule that happens to come with an apartment.

TCS: the 20% you get back

Here is the rule that frightens people out of proportion to what it actually does. Foreign remittances under LRS attract Tax Collected at Source (TCS) at 20% on the amount exceeding ₹10 lakh in a financial year (the threshold was raised from ₹7 lakh in Budget 2025).

The word doing the work is collected — not charged. TCS is not a tax on your purchase. It is an advance collection that is credited against your income tax liability when you file your return, and refunded if it exceeds what you owe. Remit ₹1 crore in a year and roughly ₹18 lakh is collected on top; every rupee of it comes back as tax credit or refund.

What TCS actually is, then, is a cash-flow item: for each remittance-heavy year, you need about 20% extra liquidity that you will recover at filing. Plan for the outflow, not for a loss. And note the interaction with the previous section — spreading instalments across years doesn't just manage the LRS cap, it also spreads the TCS float into smaller, recoverable pieces.

What India taxes on your Dubai property

Dubai's side of the ledger is famously light: no annual property tax, no tax on rental income, no capital gains tax. But if you are an Indian tax resident, India taxes your worldwide income — and this is where honest numbers matter, because plenty of marketing quietly pretends this section doesn't exist.

Rental income

Rent from your Dubai apartment is taxable in India at your slab rate, declared in your Indian return (Schedule FSI). In the 30% bracket, a gross yield of 7% is roughly a net-of-Indian-tax yield of 4.9% before service charges — still respectable, but it is the number you should be underwriting, not the brochure's.

Capital gains on sale

Sell after more than 24 months and the gain is a long-term capital gain, currently taxed at 12.5% (without indexation) under the rules in force since July 2024. Shorter holds are taxed at slab as short-term gains.

What the DTAA does and doesn't do

The India–UAE tax treaty gives you credit for tax paid in the UAE. On residential property income the UAE charges zero — so the credit is zero, and the full Indian tax stands. The treaty prevents double taxation; it does not conjure an exemption. Anyone telling you "Dubai income is tax-free" is describing the UAE side only.

Schedule FA: the disclosure you must never skip

Every year you hold the property, you must disclose it in Schedule FA (Foreign Assets) of your Indian income tax return — purchase value, income from it, any sale. This is mandatory for ordinarily-resident taxpayers regardless of whether the property earns anything.

Non-disclosure is not a slap on the wrist: it falls under the Black Money Act, with penalties up to ₹10 lakh and potential prosecution. Since your money left India through an AD bank under LRS, the paper trail already exists — the only thing skipping Schedule FA achieves is converting a fully legal purchase into a compliance problem. File it every year, and have a CA who has seen foreign-asset returns before.

The Dubai side: fees, process, protections

Once the money is in Dubai, your purchase is identical to any other buyer's, and the details are covered across this site:

• Fees: roughly 4–5% on top of the price, dominated by the 4% DLD registration fee paid near booking — the full breakdown is in the fees & buying costs guide
• Payment structures: front-loaded, back-loaded and post-handover plans compared in the payment plans guide, or side by side on your own budget with the comparison tool
• Protections: your instalments go into a project-specific escrow account regulated by RERA, the project and your unit are registered with the government from early on, and the whole process — booking, SPA, registration — can be completed from India without flying in; a passport copy is typically the only document needed to book

A note for NRIs

Everything above about LRS and TCS applies to resident Indians remitting from India. If you are an NRI buying from earnings held outside India — a Gulf salary account, for instance — you are not using LRS at all, and the $250,000 cap and TCS simply don't apply to those funds. Your Indian tax position depends on your residential status for the year, which is a conversation for your CA, not a brochure.

The Golden Visa angle

Property worth AED 2,000,000 or more — including qualifying off-plan purchases — can support an application for the UAE's 10-year Golden Visa, which is a meaningful part of why that price point is so popular with Indian buyers. Criteria, documentation and which projects qualify are set by the UAE authorities and do change, so treat visa eligibility as something to confirm in writing for the specific project before you let it drive the purchase — not as a given.