JOIN USDubai offers property in exchange of crypto but it can put you in legal trouble
As Dubai looks to become the crypto capital of the world, realtors in the city are leveraging the use of digital currency to tap on a growing pool of Indian buyers.
According to an Economic Times report, wealthy Indians are paying in cryptocurrency to acquire property in Dubai. However, such transactions come with a huge risk as most property owners remain unaware of the regulatory and legal obstacles ahead.
As per the report, with the RBI enforcing a shadow ban on crypto payments, many high net-worth Individuals (HNWI) moved their cryptocurrency investments to Dubai. In the process, many may have committed multiple offences, such as irregular cross-border transaction, violation of Foreign Exchange Management Act, etc.
Before engaging in such transactions, it's essential that resident Indians who wish to invest in Dubai real estate consult tax professionals who understand laws of both the countries, Karan Batra, a Dubai-based chartered accountant told ET.
"Since Dubai wants to be a crypto hub, buying property by paying in crypto is allowed. However, Dubai does not want to become the home for illegal money transactions," Batra added.
"Even if a small amount is paid for purchase of property, it is reported to the government. Besides disclosing the asset in foreign assets schedule of the ITR (Income Tax Returns), tax on the actual rent or deemed rent received by an Indian resident is required to be paid in India," he noted.
Moreover, with each transaction, copies of property owners' passports, their family members or close relatives in whose name the property is registered could someday fall into the hands of the Indian Income Tax Department and Enforcement Directorate.