Answer

ITR

NRI with rent from flats in India

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  1. Facts

    NRIs are taxed in India on Indian rent. Tenants must deduct TDS on rent paid to NRIs at the rates for non-residents, often higher than the actual tax. Filing ITR-2 lets you claim deductions and get the excess refunded.

  2. Provisions and law

    • Sec 195 (now Sec 393)Tax must be deducted on payments to non-residents, including sale proceeds
    • Sec 22 (now Sec 20)Annual value of property you own is taxed under house property
    • Sec 24(b) (now Sec 22(1)(b))Deduction for interest on a home loan; ₹2,00,000 cap for self-occupied houses under the old regime

  3. Analysis

    If each flat earns ₹3,00,000 and tenants deducted around 30% plus surcharge and cess, TDS may be about ₹1,87,000. After 30% standard deduction and loan interest, your actual tax may be much lower, so ITR-2 brings a refund. NRIs can claim home loan interest and Sec 80C items under the old regime like residents. A lower TDS certificate from the department can reduce deduction in future years.

  4. Conclusion

    1. Get Form 16A from each tenant and check Form 26AS.
    2. Compute income per flat with deductions.
    3. File ITR-2 and claim the TDS.
    4. Consider a lower deduction certificate for next year.

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