VOI world/ desk
Several Indian residents who purchased property in Dubai are now facing legal trouble, with summons issued by the Enforcement Directorate (ED) and notices from the Income Tax department. This follows information shared by UAE authorities regarding real estate ownership by Indians.
The ED is investigating potential violations under the Foreign Exchange Management Act (FEMA) and the Prevention of Money Laundering Act (PMLA). In many cases, funds for property purchases were routed through informal channels such as cryptocurrency, hawala networks, or high-limit credit cards, rather than official banking systems.
Under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), individuals can legally remit up to $250,000 per year through authorised banks. Transactions outside this framework are being scrutinised, especially when payments were made directly to Dubai builders or entities in UAE free zones using crypto, which could be a breach of FEMA.
Tax experts warn that undeclared foreign assets may attract penalties under the Black Money Act, including up to 120 percent tax and fines. FEMA violations could lead to penalties ranging from one to three times the transaction value. If found guilty under PMLA, the property may be classified as proceeds of crime, and there is no compounding provision available for such offences.
