Rental income arising from property in India is taxable in India, whatever your residential status and wherever you pay tax otherwise. The mechanics differ from a resident landlord in ways that catch people out — usually not at the point of earning, but at the point of trying to move the money.
This is an overview, not tax advice. Rates and thresholds change, and your position depends on your country of residence and any treaty. Confirm specifics with a chartered accountant.
TDS is deducted at a different rate
Where a tenant pays rent to a non-resident landlord, tax is deductible at source at a rate applicable to non-residents — materially higher than the rate for payments to residents, and it applies without the threshold that residents enjoy.
The practical consequence: your tenant, or whoever collects on your behalf, has a statutory obligation. If it is not being deducted and deposited, the exposure is real and it is not only yours. This is one of the most common gaps in informal arrangements — a relative collecting rent is very unlikely to be filing TDS.
Where the money lands matters
Rental income is generally credited to an NRO account. Funds in an NRO account are repatriable subject to limits and to producing the right certification from a chartered accountant confirming taxes have been paid.
This is the step that surprises people. The income is not blocked, but moving it is a documented process rather than a transfer — and the documentation depends on records you should have been keeping all along.
What you actually need to keep
- Gross rent received, month by month, with dates
- Municipal taxes actually paid during the year
- Interest paid on any home loan against the property
- TDS certificates for tax deducted by the tenant
- The registered rent agreement
The standard deduction available against rental income is computed on net annual value; municipal taxes and loan interest are treated separately. The general framework is the same as for resident landlords, which we covered in rental income tax for landlords in India — the differences for NRIs are TDS rate, account type and repatriation, not the underlying computation.
Why this is a records problem more than a tax problem
Almost nobody gets into difficulty because the rules are complex. They get into difficulty because in July they cannot produce twelve months of rent receipts, do not have the municipal tax challan, and are not sure whether TDS was ever deducted.
A monthly statement you could hand to an accountant solves most of this before it becomes a problem — which is the same argument as seeing your property without making a phone call, applied to money instead of maintenance.
Managing a property in Odisha, or from outside it? NavoAsset takes on tenanting, verification, rent collection, maintenance and reporting end to end — so the questions in this article stop being yours to chase.
Start with a free portfolio review: we look at your property, its current rent against what the location supports, the gaps in your paperwork, and what managing it properly would involve. You get that assessment whether or not you engage us, along with a full breakdown of scope and fees for your specific property.
