Unknowingly swiping abroad could now mean penalties, reversals, or forced sales.

ED Flags Dubai Home Purchases via Credit Cards, Indians Face FEMA Scrutiny. 

Indian authorities have begun scrutinising residents who bought properties in Dubai using international credit cards, a method that may breach foreign exchange regulations. The Enforcement Directorate has issued notices to some buyers, questioning the source and mode of their funds. Under India’s forex framework, purchasing overseas property is a capital account transaction that must be processed through banking channels under the Liberalised Remittance Scheme (LRS), not via credit cards, which are considered short-term borrowing. Experts say affected individuals may approach the Reserve Bank of India for regularisation or remediation—admitting the breach and paying a penalty—often after completing administrative reversals of the original payment. In certain cases, buyers might need to remit fresh funds or even sell the property, especially given the softer Dubai market. While regulators may adopt a lenient stance if funds are legitimate, the episode highlights the complexities and risks involved in cross-border property investments under the Foreign Exchange Management Act.