Clarification on TDS payment on rent to non resident

Yes. It is mandatory to deduct TDS on rent on NRI property. TDS @ 30% + Surcharge & cess @ 1.2% = @ 31.2%

Tenant has to file form 15CA on Income tax portal. If you rent paid more than 5 lakhs per annum. Tenant has to file 15CB by chartered accountant.

• The person (not being an Individual or HUF) who is responsible for paying of rent is liable to deduct tax at source.

That means 194i is not applicable to you. I deal with company tds only 

Yes, TDS under section 195 is mandatory when rent is paid to a non-resident, regardless of the amount. Since the recipient (landlord) is an NRI, the payer (tenant) must deduct TDS even if the rent is below ₹50,000/month. Section 194IB (threshold ₹50,000) applies only to resident landlords.

So in this case, TDS under section 195 must be deducted, and Form 15CA & 15CB may also be required before remitting the rent to the NRI’s account.

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• Verdict: TDS under Section 195 is mandatory for rent paid to an NRI landlord, regardless of the ₹38,000/month rent being below local resident thresholds.

• Rate: 31.2% (inclusive of cess) unless a lower deduction certificate is obtained.

• Action Items: Secure a TAN, deduct monthly TDS, deposit it via challan (ITNS 281), file quarterly TDS returns (Form 27Q), and complete Forms 15CA/15CB if annual payments exceed ₹5 lakhs.