Growth CircleNRI Rental Income in India: Tax and TDS
How rent from Indian property is taxed for NRIs, why tenants deduct a high TDS, and how to claim back the excess.
Rent from a house or flat in India is taxable in India, even if you live abroad.
How the tax is worked out
Your taxable rental income is generally the rent after allowed deductions, such as municipal taxes you paid, a statutory deduction on the net annual value and interest on a home loan, where applicable. Tax is then charged at the rates that apply to you.
Why TDS looks high
A tenant paying rent to a non-resident is generally required to deduct tax at a high rate on the gross rent, plus cess. Because your actual tax is on net income, the amount deducted can be more than you owe.
What to do
- Make sure the tenant deposits the TDS and gives you the certificate.
- Check that the tax shows against your PAN in your tax statement.
- File your Indian return and claim a refund of any excess.
- Keep the rent agreement and payment records.
Sending rent abroad
Rent usually reaches your NRO account first. Moving it abroad follows the remittance rules and requires tax papers. See our note on NRO, NRE and FCNR accounts.
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