TDS on rented property

Q: Is an NRI tenant required to deduct TDS on rent paid for a residential property rented in India?

Sharan Basappa, Hyderabad

4th September 2018

Legal in Gachibowli, Hyderabad

tds

tds on property

tds on rented property

tds benefits for nri on rented property

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The rules of Tax deduction at source (TDS) for rental property in India changed under the budget 2017 proposals. Effective June 1, 2017, tenants are required to deduct TDS and submit the money to the tax authorities if rental amount is Rs.50000 or more per month. Landlord must provide their PAN details to their tenant. Failure to provide PAN to tenant can result in TDS withholding 20% instead of 5%

visaltanwar, Delhi

14th September 2018

Comment

Income Tax on Rent received by NRI is taxable under head House Property and is levied in the same manner as Resident Indian. Out of the total rent received by the NRI, municipal taxes are first allowed to be reduced. After that, from the balance account - 30 percent is allowed to as standard deduction and deduction of interest paid on home loan is allowed.

Chandrachur, Bangalore

14th September 2018

Comment

Chandrachur,
The Rs. 50,000 or above rental value does NOT apply if the rental property is owned by an NRI.Tenants who are renting property owned by a non-resident (NRI) are required to deduct 30% TDS on the rental payment and submit the deducted TDS amount to the tax authorities. Tenant must also complete and submit Form 15CA online to the tax department.

visaltanwar, Delhi

14th September 2018

Hello Sharan,
If your status is NRI, your income which is earned or accrued in India is taxable in India. Salary received in India or salary for service provided in India, income from a house property situated in India, capital gains on transfer of asset situated in India, income from fixed deposits or interest on savings bank account are all examples of income earned or accrued in India. These incomes are taxable for an NRI if the gain is more than 2.5 lakhs, its taxable.

Ramya Janagam, Hyderabad

14th September 2018

Comment

Sharan---
If you have a property located in India, the rent received by the NRI from such property would be taxable in India. However, it may also be taxable in the country of your residence.
Whether it is taxable in your country of residence depends on tax laws of the country in which you are residing currently. If that country has Double Tax Avoidance Agreement (DTAA) with India, tax in such cases would not be levied in your country of residence. For example, USA has Double Tax Avoidance Agreement with India and so, the rent earned by NRI in India from property is not taxable in the USA.

Pramela, Gurgaon

14th September 2018