TDS on rent of NRI Properties | Fusion - WeRIndia

TDS on rent of NRI Properties

TDS on rent of NRI Properties

Normally, TDS is deducted on rent after the threshold limit.

However, you have to deduct the TDS if your landlord is an NRI (non-resident Indian).

NRIs commonly invest in real estate in India and let out their properties.

But, if you are living in such homes, make sure that you deduct TDS every month from the rent you are paying.

Here are a few important points on TDS on rent of NRI properties:

  • It is mandatory to deduct the TDS on rent of the properties of the NRIs irrespective of the amount. For instance, you have to deduct it even if you are paying ₹5,000 per month as rent.
  • The TDS should be deducted at a flat rate of 31.2 per cent. But, if your landlord furnishes a certificate that his/her total income falls below the limit of tax exemption, then there is no need to deduct it.
  • It is the duty of the tenant to make sure that his/her landlord is an NRI or not.
  • You have to get a tax deduct number (TAN) to deduct the TDS which can be obtained from the NSDL website.
  • After the issuance of TAN, the tenant can deduct the tax each month online and pay the remaining balance to the landlord.
  • The tax should be deducted from the rent on time and deposited to government properly.
  • The tax which is deducted each month should have to be paid to the government in the following month by the seventh day.
  • Failing to deposit the TDS on time will lead to imprisonment of three months to seven years as per Section 276B of the Income-tax Act.
  • Failing to deduct the TDS on rent of the NRI property leads to a penalty equal to the tax that is not deducted according to Section 271C of the Act.
  • The tenant also has to file a tax return for the TDS paid on rent within a month of the end of every quarter. For instance, the TDS return for the tax paid for July- September quarter should be filed by 31 October.
  • He also has to issue a TDS certificate to his landlord within 15 days from the due date.
  • The tenant should have to obtain Form 15CB from a chartered accountant if the rental income exceeds ₹5 lakh per annum.

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