TDS on rent paid to RNOR Landlord. Can RNOR US tax resident take benefit of DTAA by filing form 41

• TDS Rate: Deduct tax under Section 194I / 194IB as a resident rate (not Section 195 / 31.2%).

• Form Submission: DTAA relief via Form 10F does not reduce Indian TDS on domestic rental property income, as India holds primary taxing rights over real estate situated within its borders.

Thanks Aashok. I have the same view on TDS rate for RNOR but there seems to be a lot of confusion amongst other practitioners and thus would appreciate if you have come accross any case law, circular or clarification to support this view

Important distinction: RNOR (Resident but Not Ordinarily Resident) is NOT the same as NRI (Non-Resident Indian). This changes everything for TDS and DTAA.

RNOR for Indian tax purposes: An individual is RNOR if they are present in India 182+ days in the current year (or 120+ days with prior 4-year test) BUT were a non-resident in 9 of the past 10 years OR were in India less than 729 days in the past 7 years. Typically applies to returning NRIs in their first 2-3 years back.

Residential status for TDS: RNOR is a resident of India under the Income Tax Act. Therefore, TDS on rent paid to an RNOR landlord is governed by Section 194I (if the tenant is a business with turnover above Rs 2.4 lakh/year) or Section 194IB (if individual tenant pays more than Rs 50,000/month). Section 195 (NRI TDS) does NOT apply.

DTAA applicability: India-US DTAA applies to a resident of USA or a resident of India. An RNOR is a resident of India for income tax purposes. The India-US DTAA Article on rental income would not override the Indian domestic TDS provisions for a landlord who is an Indian resident - even if the RNOR also files taxes in the USA.

Practical steps: Deduct TDS under Section 194I or 194IB at the applicable rate (10% for businesses on annual rent above Rs 2.4 lakh, 2% for individual/HUF on monthly rent above Rs 50,000). Deposit via Challan 281 and file Form 26Q (194I) or Form 26QC (194IB). Issue Form 16A or Form 16C to the landlord.

The RNOR landlord then declares this rent under income from house property in their ITR and claims TDS credit from Form 26AS.

For a complete guide on TDS rates, thresholds, forms, and when Section 194I vs 194IB applies, see this [TDS on rent guide under Sections 194I and 194IB](https://taxgarden.in/blog/tds-on-rent-section-194i-194ib-india-ay-2026-27).

Thanks for the detailed and useful response.