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

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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)
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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)
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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.

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Divya Sharma

Divya Sharma (Querist)
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17 July 2023 Thank you for your response. Are there any cases where exemption is available?

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Divya Sharma

Divya Sharma (Querist)
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17 July 2023 Thank you for your response. Are there any cases where exemption is available?

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Dhirajlal Rambhia

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