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Taxes on rent

Subramanian.V (Retired) (64 Points)

06 August 2017

I am a new NRI in US. I would like to know the tax implications if I give my apartment on rent. I am getting interest income of about Rs.2.20 lakhs. I am not getting any other income from India. I am also not getting any income in USA.

1.Is the Tenant required to make any deduction -like 10% or 30.9% from the rent he pays?

2. Is there any standard deduction which I can claim for repairs etc"

3. Can I deduct the property tax ?

4. Is the income from rent ie. Gross rent less deductions in 2 & 3 above treated as normal income & it is to be added to my interest income for tax calculation purposes? ( As of now my income is within threshold limit & it may go beyond it if rent income is added. Hence this query please)

Any other point I have to take care?

I would appreciate learned experts to kindly advice me

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 06 August 2017

1. Yes, TDS u/s. 195(j) at 30.9%

2. Yes, 30% standard deduction over HP income

3. Yes

4. Yes, it will be added (as per aforesaid calculation) to the interest income and after basic exemption limit of 2.50 lakhs (3.00 lakhs Sr. Ctz.) it will be taxed at 5% rate upto 5 lakhs limit (i.e. at slab rate). The TDS amount will be refunded back to you after adjustment of tax liability, when you file ITR.

Jithendra Patel (26 Points)
Replied 06 August 2017

TDS on rent only if the rent received per month is more than Rs.50000/- p.m. However the annual rent recieved less municipal taxes paid less 30% standard deduction will form part of the taxable income under the head Income from house property.

Subramanian.V (Retired) (64 Points)
Replied 06 August 2017

Sri Rambhia saheb,

Thank you very much. Will a NRI Senior Citizen be elegible for higher threshold limit for income tax? Kindly clarify as my understanding was different.

Subramanian.V (Retired) (64 Points)
Replied 06 August 2017

Sri Rambjia saheb, Sorry sir, One more point. The rent income will be in the range of 20k to 23k. I am yet to give it on rent. Being a NRI & aged man, looking at pros & Cons. Kly clarify whether TDS or GST applicable?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 06 August 2017

" Will a NRI Senior Citizen be elegible for higher threshold limit for income tax?"
A Big NO.

" I am yet to give it on rent. Being a NRI & aged man, looking at pros & Cons. Kly clarify whether TDS or GST applicable?"

TDS will be applicable, but you will be able to get refund of 25% (as only 5% tax slab rate, upto 5 lakhs income); secondly you can get 80C deduction upto 1.50 lakhs,,,,,, which will bring down tax liability. So over all win-win situation.

GST not applicable for residential renting services........

Other Pro & Cons........... should get trouble free tenant !!!!!!!!