Answer

ITR

NRI earning rent from Indian property

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  1. Facts

    Rent from Indian property is taxable for NRIs under house property. Tenants must deduct TDS on rent paid to a non-resident.

  2. Provisions and law

    • Sec 22, Income-tax Act 1961 (now Sec 20, Income-tax Act 2025)Rent is taxed as income from house property.
    • Sec 24(a), Income-tax Act 1961 (now Sec 22(1)(a), Income-tax Act 2025)Standard deduction of 30% of annual value.
    • Sec 195, Income-tax Act 1961 (now Sec 393, Income-tax Act 2025)Tax is deducted on payments to non-residents at the rates in force.

  3. Analysis

    Say annual rent is ₹4,80,000 and municipal tax is ₹10,000. Net annual value is ₹4,70,000, less 30% standard deduction, leaves ₹3,29,000, minus any home loan interest. Claim the TDS cut by the tenant. Many tenants forget TDS on NRI rent, which can cause issues for them.

  4. Conclusion

    1. Total rent and municipal tax paid.
    2. Compute house property income.
    3. Deduct home loan interest if any.
    4. Claim TDS and file ITR-2.

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