Indian Property Buyers Warned Against Using International Credit Cards in Dubai

Real estate and tax experts have warned Indian property buyers against using international credit cards (ICCs) to make down payments on properties in Dubai, stressing that such transactions could violate Indian laws and invite regulatory scrutiny.

According to experts, international credit cards are only permitted for current account transactions—such as travel, shopping, and education-related expenses—and not for overseas real estate investments.

Anurag Chaturvedi, CEO of Andersen UAE, explained that under India’s Foreign Exchange Management Act (Fema), overseas property purchases are classified as capital account transactions. “Using an international credit card to pay for real estate abroad bypasses the Reserve Bank of India’s (RBI) approved framework, namely the Liberalised Remittance Scheme (LRS), which is the only legal channel for Indian residents to invest in overseas property,” he told Khaleej Times.

RBI’s Legal Framework

The RBI’s Liberalised Remittance Scheme allows Indian residents to remit up to $250,000 per financial year through authorised banks, ensuring compliance and transparency. ICC usage for property transactions, Chaturvedi warned, “amounts to a violation of Fema.”

Some developers in Dubai accept partial down payments—usually under Dh80,000—as reserves to give buyers more time to arrange full transfers through legal banking channels.

Gaurav Keswani, CEO of JSB Incorporation, echoed the warning: “The use of international credit cards for such transactions, while seemingly convenient, does not align with Fema and LRS norms. These cards are designated for current account transactions – not capital account investments like real estate.”

Risks and Penalties

Experts cautioned that buyers who bypass RBI rules face serious legal and financial risks, including investigations by the RBI, Income Tax Department, and Enforcement Directorate (ED). High interest rates, foreign exchange mark-ups, and late fees also make ICC usage financially unwise.

“Buying property abroad with an international credit card is like trying to pay for a house with a travel wallet – it’s not permitted, and it could get you into serious trouble,” Chaturvedi said.

Expert Advice

Property investors were urged to:

• Use the Liberalised Remittance Scheme through authorised banks.
• Keep all transactions properly documented and reported.
• Consult financial or legal advisors before committing to cross-border investments.

Keswani added that developers and agents must also promote transparent and compliant processes to protect buyers and ensure trust in the market.