Can NRI rent out property in India?

Yes, NRIs (Non-Resident Indians), OCIs, and PIOs can legally rent out their immovable property (residential or commercial) in India under the Foreign Exchange Management Act (FEMA) and Transfer of Property Act, 1882.

Can NRI Rent Out Property in India?

This includes leasing the property to Indian residents, other NRIs, OCIs, or PIOs. There’s no restriction on earning rental income from Indian property as long as you comply with statutory requirements. Key legal & tax points:

• Lease Rights: An NRI is treated just like any other property owner; they can grant a lease or leave & licence and collect rent.

• Rental Income: Rent received in India is taxable as income from house property under the Income Tax Act.

• TDS (Tax Deducted at Source): The tenant must deduct TDS at 30% plus applicable cess and surcharge before remitting rent to an NRI.

• Accounts for Receiving Rent: NRIs typically receive rent in a Non-Resident Ordinary (NRO) account; repatriation is allowed after tax compliance.

• Agreement Compliance: It’s strongly recommended to have a written, stamped, and registered lease/leave & licence agreement to enforce lease terms and support tax filings.

NRIs can rent out property in India legally, but must ensure proper tax withholding (TDS), correct bank account usage, and formal documentation.

You as an NRI may purchase real estate in India. It could be a residential or business building. In India, NRIs are permitted to both obtain a loan and purchase real estate. If you want to make some money, you can either rent it out or lock it up and utilise it whenever you are in the city. So keep reading to know about the process for NRI renting property in India.

What is the NRI’s guide to rent property in India?

An NRI is legally permitted to rent out the property they own inside of India. As long as the tax requirements for their rental revenue are satisfied. The tenant has two options for paying the rent if you rent out your property. The following paragraph will guide you in detail to know if can NRI rent property in India.

They can first transfer the rent to your NRO (Non-Resident Ordinary) account. An NRO account is permitted to transfer up to $1 million each financial year. Secondly, you can utilise your bank account in your home country as well. The renter of your Indian property may make a direct bank transfer to your account in the country where you reside, but they must also file Form 15CA with the Income Tax Department. Also, you could send Form 15CB. This helps you understand if can NRI rent out property in India.

What is the tax on rental revenue for NRIs in India?

The NSDL website allows the renter to obtain TAN online. Once the tenant has a TAN, they must subtract TDS, pay it online, and then pay the NRI the remaining balance as rent. House rent payments must have a 31.2% TDS deduction.

The following deductions are available to NRIs:

• Rent is subject to a 30% standard deduction.

• Deduction for paid property taxes and principal repayment under Section 80C. This can also include stamp duty and registration fees.

• Deduction for interest paid on a loan for a new investment.

• After these deductions, the rent will be added to the total income and taxed according to the tax slab that applies to him or her.

This is all about the NRI renting property in India.