Rental income for nri

Tax queries 296 views 2 replies

ashok

vncf

96 Points Posted on 30 December 2016

Hi All, One of my relative is a NRI from Australia. He is having property rental income from India. The following are the queries:-

1) Is TDS applicable to be deducted by the tenant who is individual? If so, at what rate?

1 a) Whether the answer is different, if the tenant is corporate?

2) If the agreement is split between rent and maintainance, whether the portion relating to maintaninance is liabile to be offered to tax or liable for TDS?

3) How will be the rental income taxed or offered for tax in Australia? I mean once the rental income suffers TDS or tax in India, then whether the same will be taxed in Australia for differential taxes? For eg; Tax rate in India is 30% and Tax rate in Australia is 35%. If Income suffers tax in India @ 30%, then the differntial tax of 5% (35%-30%) is liable in Australia?

4) Any challenges in transferring/remitting the rental income from NRO to NRE account?

Your valuable comments is highly appreciated and for academic purpose it would be great if sections or reference are also quoted.

Replies (2)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211715 Points Posted on 31 December 2016

1. No, unless liable for audit u/s. 44AB

1 a) Yes.

2. If direcly paid by tenant, not included; otherwise yes

3. Depends upon taxation laws of . Australia. & DTAA between both countries.

4. As per RBI directives.

Abhinav

397 Points Posted on 02 January 2017

TDS will apply to the tenant even if individual u/s 195 of Income Tax Act. You should inform the tenant of this compliance requirement else he can be deemed assessee in default under the Income Tax Act and related consequences can follow.

NRI can take credit of the rental income in his NRO or NRE account as per FEMA Deposit Regulations, 2016

Thanks!