Wealthy Indians are now buying properties overseas under the names of the kids through RBI’s Liberalised Remittance Scheme (LRS), the Times of India has claimed in a report.

According to the report, Indians are increasingly investing in properties overseas, with locations such as California, Dubai's Emirates Hills and Palm Jumeirah, and London’s Mayfair being popular choices. Recently, minors have begun investing in these overseas properties alongside their parents, especially in the UAE.

The LRS allows individuals to remit up to $250,000 per financial year for various purposes, including buying property. An amendment effective August 24, 2022, requires unused funds to be returned to India within 180 days if not invested. This has made it difficult to accumulate funds over time for property purchases. To navigate these restrictions, parents are now using minors to help remit enough funds for property purchases, the report claimed.

According to Tax partner Gautam Nayak at CNK & Associates, “Funds can be remitted abroad by a minor under LRS, using gifts from parents in India. Further, gifts from parents to children do not have any tax impact in India.”