Question 1

What is the TDS rate on rental income paid to NRIs?

Accepted Answer

Tenants must deduct TDS at 31.2% (30% tax + 4% cess) on rent paid to NRIs if monthly rent exceeds Rs 50,000. With Tax Residency Certificate (TRC), this can be reduced to DTAA rates like 12.5% (UAE) or 15% (USA/UK/Singapore).

Question 2

How can NRIs reduce TDS on rental income?

Accepted Answer

Get TRC from your country of residence and provide to tenant. They can then apply DTAA rate instead of 31.2%. Alternatively, apply for Lower TDS Certificate under Section 197 by filing Form 13 with Income Tax department. This is useful if your total income is below taxable limits.

Question 3

What deductions can NRIs claim on rental income?

Accepted Answer

NRIs can claim: Standard deduction of 30% on Net Annual Value (after municipal taxes), home loan interest (up to Rs 2 lakh for self-occupied, unlimited for let-out), and municipal taxes paid. This reduces taxable rental income significantly.

Question 4

Is NRI rental income from India taxable in both countries?

Accepted Answer

Rental income is first taxable in India where the property is located. If you are tax resident of a DTAA country, you can claim credit for Indian tax against your tax liability there. This avoids double taxation on the same rental income.

Question 5

How should NRIs receive rental income - NRE or NRO account?

Accepted Answer

Rental income must be credited to NRO account only (not NRE). From NRO, you can transfer up to USD 1 million per year to NRE/foreign account after paying applicable taxes. Keep proper documentation including rental agreement and TDS certificates.

NRI Rental Income Tax Calculator

Related Calculators

House Property Income Tax

DTAA Tax Relief & Foreign Tax Credit

Lower TDS Certificate (Section 197)

NRI Total Tax Liability Calculator

Related Articles

NRI Rental Income: Tax Planning, TDS & Deductions

NRI DTAA Double Tax Relief: Complete Guide with Country-wise Rates

Budget 2025: Two Self-Occupied Properties Tax-Free for NRIs

Frequently Asked Questions