More Indian families now buy homes abroad for children studying overseas, for a second home, or to diversify. Resident Indians can do this legally through the Reserve Bank of India's Liberalised Remittance Scheme (LRS). Here is a summary; check current limits and tax rates with your bank and CA before acting.
The LRS limit
Each resident individual can remit up to USD 250,000 per financial year for permitted purposes, which include buying property abroad. Family members can pool their individual limits to buy one property, provided each is a co-owner.
How to remit
- Remit through an authorised bank in your own name, with Form A2 and the required declarations.
- Show the sale agreement or the developer's demand letter.
- Funds must go directly for the purpose stated; keep all bank advices.
TCS (tax collected at source)
Banks collect TCS on LRS remittances above the threshold set in the tax law. TCS is not an extra tax: it is credited against your income tax liability for the year, or refunded. It does affect cash flow, so plan for it.
Borrowing abroad
Resident Indians generally cannot use LRS money to service loans in a way that breaks RBI rules, and foreign mortgages for residents have restrictions. Take advice before combining LRS with a foreign loan.
Tax and reporting in India
- Rental income from the overseas property is taxable in India for residents, with credit for foreign tax under the applicable treaty.
- Capital gains on sale are taxable in India.
- Report the property in Schedule FA of your income tax return every year. Missing this can attract heavy penalties under the Black Money Act.
Tip:Never use informal channels to send money for property abroad. It breaks FEMA and creates serious problems later.
Choosing a market
Popular choices for Indian families include the UAE, the UK, Singapore, Australia, Canada, Portugal and Greece. Each has its own rules for foreign buyers, taxes and visas. Our Dubai guide covers the most common choice in detail.
How we help
ATTPL Realty's international desk helps resident Indians shortlist properties abroad through registered partners and plan the LRS process. Contact us to start.
Frequently asked questions
How much money can I send abroad to buy property?
Up to USD 250,000 per resident individual per financial year under LRS, and family members can pool their limits as co-owners.
Is TCS on foreign remittance refundable?
TCS is credited against your income tax for the year. If it exceeds your tax, you can claim a refund.
Do I need to report overseas property in my tax return?
Yes. Resident Indians must report foreign assets in Schedule FA every year.
This article is general information, written in November 2026, and is not legal, tax or financial advice. Rules, rates and limits change; please confirm the current position with the authority concerned or a qualified professional before you act.
