What is the TDS rate on rent paid to an NRI?

Rent paid to a non-resident individual falls under section 195 of the Income-tax Act, 1961, now section 393(2) (Table: Sl. No. 17) of the Income-tax Act, 2025. The rate is 30% plus 4% cess, which is 31.2%, with surcharge added only where the amount crosses the surcharge thresholds.

Is there a threshold below which TDS on rent to an NRI is not required?

No. The ₹50,000-a-month thresholds apply only to rent paid to residents. For a non-resident landlord, tax is deductible from the first rupee of rent that is chargeable to tax in India.

Does the tenant need a TAN to deduct TDS on rent paid to an NRI?

Yes. The simplified PAN-based challan route for rent available when the landlord is resident does not apply. The tenant needs a TAN, deposits the tax by challan and files the quarterly non-resident TDS return in Form 144 (earlier Form 27Q).

How can an NRI landlord reduce TDS on rent?

By applying to the Assessing Officer for a lower or nil deduction certificate under section 197 of the 1961 Act, now section 395(1) of the 2025 Act, in Form 128 (earlier Form 13). The tenant then deducts at the rate stated in the certificate for the period it covers.

Can an NRI claim a refund of excess TDS on rent?

Yes. The NRI files an income tax return (generally ITR-2) showing the rent under income from house property, claims the 30% standard deduction and the TDS credit reflected in Form 26AS and AIS, and the excess is refunded.

Does the DTAA reduce the TDS on rent from Indian property?

Usually not. Under most of India's tax treaties, income from immovable property may be taxed in the country where the property is situated, so India keeps its taxing right. The country of residence normally gives credit for the Indian tax under its own rules.

What happens if the tenant fails to deduct TDS on rent paid to an NRI?

The tenant can be treated as an assessee in default for the tax not deducted and must pay interest at 1% a month from the date the tax was deductible until it is deducted, and 1.5% a month from deduction until deposit, under section 201(1A), now section 398(3).

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