NRI Renting Out Property? 30% TDS Hits Your Rent

If you are an NRI with a rented property in India, your tenant must deduct 30% TDS on rent, you must file an Indian tax return, and you can legally send remaining money abroad — here is exactly how.

Here's what happened: NRIs renting out Indian property face 30% TDS on gross rent — tenants are legally required to deduct this before each payment and deposit it with the Income Tax Department.. Post-tax rental income can be remitted abroad through an NRO account, up to USD 1 million per year, but requires Form 15CA and CA-certified Form 15CB for each transfer.. NRIs must file an annual Indian Income Tax Return declaring rental income and can claim deductions like 30% standard deduction and home loan interest to lower tax outgo..

What you should do: Inform your tenant immediately to deduct 30% TDS on rent and deposit it using Challan 281 — non-deduction makes the tenant liable for penalties.. Open or activate an NRO (Non-Resident Ordinary) account with your Indian bank to receive rent legally and initiate foreign remittances from it.. Hire a local CA to file Form 15CB and Form 15CA before each remittance abroad, and to file your annual Indian ITR claiming all eligible deductions..

NRIs can apply for a lower TDS certificate under Section 197 — if your actual tax liability after deductions is less than 30%, the IT department can authorise a reduced deduction rate officially.