Indian citizens should deduct tax on the rent they pay to their landlords in specific circumstances, deposit to the PAN, and give a form to the property manager stating the tax deducted and the rent paid. Non-resident Indians (NRIs) invest into properties in India and let it for rent. Does the rule apply to rent paid for properties owned by NRIs?
Who can be considered as NRI?
A person who is of Indian origin or a citizen of India however not a resident of India is known as a NRI. The residential status of an individual will be determined under Segment 6. As per the part, an individual is an resident of India on the off chance that he satisfies any of the following conditions:
If he/she has resided in India for a minimum period of 182 days during the earlier year.
If he/she has resided in India for a minimum period of 60 days during the previous year and a minimum of 365 days during four immediately before previous years.
In this regard, an NRI is the person who doesn’t fulfill any of the above criteria.
Provisions for TDS when renting an NRI property
Budget 2017 changed the rules for tax deduction at source on rent paid in India. Tenants paying rent on properties owned by NRIs are required to deduct 31.2% tax at source and submit the aggregate amount to the tax authorities. Upon payment, the tenant must fill-in Form 15CA and submit it online to the income tax department. In this case, TDS is mandatory on the rent paid irrespective of the amount payable.
Spending plan 2017 changed the standards for charge derivation at source on lease paid in India. Occupants paying rent on properties claimed by NRIs are expected to deduct 31.2% expense at source and present the total add up to the duty specialists. Upon installment, the occupant should fill-in Structure 15CA and submit it online to the personal duty division. For this situation, TDS is obligatory on the lease paid independent of the sum payable.
