Moment guide · FY 2026-27

I am earning rental income in India as an NRI

How is rental income from India taxed for an NRI?

An NRI's rental income from Indian property is taxed at a flat 30% — not the resident slab — after the 30% standard deduction under section 24(a) and municipal taxes. The tenant deducts TDS under section 195 on the gross rent at the NRI rate, so apply for a Form 13 lower certificate before the payment, and repatriate the net rent from the NRO account within the USD 1 million annual limit.

The #1 trap

Expecting the resident slab treatment on NRI rental income — the flat 30% rate applies with no basic exemption set-off, though the 30% standard deduction under section 24(a) and municipal taxes still come off. Also, the tenant's TDS under section 195 is on the gross rent at the NRI rate, so obtaining a Form 13 lower certificate before the rent is paid is the way to avoid over-withholding.

Rita, NRI in Singapore earning rent from a Chennai flat

Rita, an NRI in Singapore, earns ₹6,00,000 a year in rent from a flat in Chennai. Her tenant deducts TDS under section 195 on the gross rent at the NRI rate of 30%, which is ₹1,80,000, and remits the net ₹4,20,000 to her NRO account. In her Indian return, Rita computes the net annual value: gross rent of ₹6,00,000 minus municipal taxes of ₹24,000, giving ₹5,76,000, and then the 30% standard deduction under section 24(a), which is ₹1,72,800, leaving taxable rental income of ₹4,03,200. The tax at the flat 30% NRI rate is ₹1,20,960, which is less than the ₹1,80,000 TDS the tenant deducted, so Rita applies for a Form 13 lower-deduction certificate on TRACES before the next rent payment, and the tenant then deducts at the certified rate, avoiding the refund wait. The India-Singapore DTAA does not provide a lower rate for rental income from immovable property situated in India, because the treaty allocates such income to the source country, so the 30% stands; a treaty that did provide relief would need the TRC and Form 10F. The net rent credited to her NRO account is repatriable to Singapore up to the USD 1 million annual limit, with Form 15CA/CB where required. Rita files her return as a non-resident, reports the rental income, claims the TDS credits from her 26AS, and keeps the tenant's TDS certificates. A quick call with us dials in the final figure. Rita also verifies the municipal tax receipts before claiming the section 24(a) deduction, because the municipal taxes paid in the year reduce the gross annual value, and the deduction is allowed only on the taxes actually paid. If the tenant pays the municipal taxes on her behalf, the amount is added back to the rent and the deduction is adjusted. The tenant's TDS under section 195 is on the gross rent, and if the tenant fails to deduct, the rent is still taxable to Rita and the tenant faces the disallowance under section 40(a)(ia) plus interest. The Form 13 lower certificate is applied for on TRACES before the rent is paid, and the certificate is specific to the tenant and the property. If the property is self-occupied for part of the year and rented for part, the two periods are computed separately with the annual value apportioned. A quick call with us dials in the final figure.