Indian tourists to UAE can use credit card for shopping - not property down payments

Dubai: Visitors from India to the UAE can use their credit cards to make payments for shopping, hotel stays and any other spending they have in mind.

But if they are planning to make a down payment on a property in Dubai or elsewhere in the UAE, don’t reach out for the credit card.

Even with increased awareness on how to spend when travelling abroad, many Indian visitors to the UAE still instinctively are using their credit cards to make a down payment on an offplan property buy.

Especially, when developers are offering just 1%-2% down payment schemes.

But doing that comes with a sting.

“(International) credit cards are meant for personal spends, travel, shopping, any medical expenses – but not capital investments like property,” said Gaurav Keswani, CEO of Dubai-based consultancy JSB Incorporation.   

“That (property down payment while overseas) falls under RBI’s ‘Liberalised Remittance Scheme’.

“When a resident Indian uses a card (while on an overseas visit), you skip the entire compliance trail. Which means no authorised dealer, no ‘Form A2’, no TCS (Tax Collected at Source).

“The credit card based payment may go through, but it’s not ‘clean’. And when regulators ask questions later, saying ‘the card worked’ won’t hold up.”

This is the constant messaging that India’s financial and tax consultants are repeatedly informing their clients when they travel abroad.

According to property market sources in the UAE, even with these alerts, they have seen visitors from India reach for their credit cards to book a property.

For resident Indians, the yearly remittance cap remains $250,000.

The RBI requires the remitting account to be over a year old.

"When making an overseas investment, declare that property in your Indian tax returns," said Keswani. "Ignore any of these, and you risk trouble later, especially during a resale or if the funds need to come back to India."

“Many offplan deals in Dubai now have down payment requirements of 5% or even lower,” said a property broker. “I have repeatedly brought up RBI’s Liberalised Remittance Scheme compliance needs to get resident Indian buyers from using their credit cards.”     

Indian authorities are getting stricter on overseas investments made by resident Indians, requiring that there are adequate trails of how the funds are transferred and used.

“Buyers from India would visit Dubai, fall in love with a project, and swipe their card to lock it in,” said Keswani. “Awareness was low. Things are different now - India has sharper compliance, better digital tracking, and more cross-border data sharing.

“What felt harmless then could now trigger questions. That card swipe (on an overseas property purchase down payment) could cost you clarity, tax benefits, and clean exit options down the road.”

· They will need to go through their bank in India bank under the Liberalised Remittance Scheme.

· These buyers must use a remitting account that’s at least a year old. Submit the required Form A2, PAN card details, and release the funds from their bank account directly to the developer’s UAE account.

· A 20% TCS (tax collected at source) will apply. That’s recoverable at tax filing time.

“The paperwork might feel heavy, but it sets you up for smooth repatriation, clean ownership, and zero surprises,” said Keswani. “You’re not just buying a property; you’re building a safe cross-border asset.”