Query regarding TDS deduction on rent paid to UAE-based NRI property owner

Save Share

This query is : Resolved

Quick Summary

If you're renting a property in India from an NRI landlord based in the UAE, you may need to deduct TDS. The standard rate is 30% plus surcharge and cess under Section 195 of the Income Tax Act. You'll need to apply for a TAN, deposit the TDS monthly, and file Form 15CA online. An exemption is possible if the landlord obtains a NIL TDS certificate from the Indian Income Tax Department.

Divya Sharma

Divya Sharma (Querist)

17 July 2023 I live in a rented flat in Noida, U.P., paying a rent of less than 2 lakhs per annum (INR). The flat owner is an NRI residing in Dubai, UAE. I understand that India has a Double Tax Avoidance Agreement with the UAE.

Please advise whether I, as a tenant, am liable to deduct TDS before paying rent every month to the NRI owner. If yes, then how much is the deduction and how should I go about the formalities of deducting and depositing this amount to the tax authorities? The rented flat is for residential use only.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

17 July 2023 Rate of TDS on rent paid to NRI landlord is at 30% +surcharge + cess u/s. 195 IT act.
You must apply for TAN and pay the TDS deducted to treasury by 7 th of next month positively.
Following payment you must complete Form 15CA and submit it to the Income Tax Department online.

Message likes : 1 times

Divya Sharma

Divya Sharma (Querist)

17 July 2023 Thank you for your response. Are there any cases where exemption is available?

Message likes : 1 times

Divya Sharma

Divya Sharma (Querist)

17 July 2023 Thank you for your response. Are there any cases where exemption is available?

Message likes : 1 times

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

17 July 2023 Yes, if the landlord can procure NIL TAX Deduction certificate u/s. 197 IT act, from his Jurisdictional ITO.