Around 7,500 Indians who have bought properties in Dubai in the last few years are having sleepless nights after the Income Tax (IT) department launched an investigation into their high-end assets, reports The Indian Express.
IT department's Intelligence and Criminal Investigation (I&CI) wing is scrutinising data of Indians who have invested in real estate in Dubai and is looking at sources from where funds were acquired for the investments.
The authorities are also investigating whether these assets have been declared by the owners in their IT returns.
According to Dubai Land Development, between January and March 2018, around 1,387 Indians invested AED 3 billion in 1,550 real estate deals in Dubai. In 2017, Indians invested a whopping AED 15.6 billion in Dubai and between 2013 and 2017, Indians bought properties worth AED 83.65 billion in Dubai according to Dubai Land Development records.
Owning property abroad is not illegal for Indian nationals and under the Foreign Exchange Management Act of 1999, residents and non-residents can own immovable property overseas.
A resident individual can invest up to $250,000 per year in properties and securities abroad under Reserve Bank of India's liberalised remittance route.
However, residents and ordinary residents in India have to disclose all foreign assets owned by them in IT returns since the 2011-12 financial year.
Non-disclosure can attract a tax of 30 per cent and penalty of up to 300 per cent of the tax along with criminal prosecution under the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act (Black Money Act), which was introduced in 2015.
In Dubai, around 5,800 Indians have been linked to properties in high-end localities like Emirates Living, Motor City, Palm Jumeirah, The World, Old Town Island, and Dubai Marina.