Rental income for NRI person

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DIVYESH JAIN (Querist)
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09 September 2021 Dear Sir,

One of my client is an NRI and will now receive rental income of Rs. 35000/- per month from his residential house property in India.

Is it necessary for the tenant who is an Indian citizen to deduct TDS from this rent amount. What are the Income tax compliances the tenant needs to follow if he is paying rent to an NRI.

Is there any way deduction of TDS be avoided on rent.

Please help me regarding this matter.

Regards,
Divyesh Jain

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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09 September 2021 If the landlord is a Non-resident, the liability to deduct tax arises under section 195 of the Income-tax Act. The rate applicable in this case is be 30% plus surcharge and education cess i.e 31.2%.
TDS has to be deducted irrespective of the quantum of amount. NRI can ask for lower deduction or no deduction certificate provided his total income in India is below exemption limit. It is Mandatory to obtain TAN in this case.
The rent proceeds will have to be credited to NRO account of NRI.
Upon payment, the tenant must fill form 15CA and submit it online.

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DIVYESH JAIN

DIVYESH JAIN (Querist)
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09 September 2021 Do the tenant needs to file quarterly tds return also apart from filing Form 15CA?
and whether lower tds deduction application can be made anytime during the year by the owner of the property or is there any due date for it?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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09 September 2021 1. Yes. But filing form 15CA not required, as the rent gets credited to his NRO account.
2. Can be applied any time, but will be effective from the date specified in the order.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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09 September 2021 Ok, Thank you Dhirajlalji for your advice. It's very helpful.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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10 September 2021 If the rent proceeds are credited to NRO account which is opened in India the rent amount will be in Indian bank account only. Is it necessary to file Form 15CA in this case as money is not remitted out of the country.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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11 September 2021 Correct. Form 15CA is not required to be filled.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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11 September 2021 Ok, Thanks for your reply.

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