Renting out property in India as an NRI

This is the whole picture on one page, for an owner who has just started letting a property in India from abroad, or who has just realised that their tax residency changed and the rules changed with it. Where a part of it needs more room, there is a longer page linked from that section.

The account the rent goes into

When you become an NRI, a resident savings account cannot stay a resident savings account. Under FEMA it has to be re-designated, normally as an NRO account. This is not housekeeping. Penalties for continuing to operate a resident account after your status has changed can reach three times the amount involved, or Rs 2 lakh.

Rent from Indian property is a permissible credit to an NRO account. The RBI says so in its own FAQ, and banks commonly route rent there as a matter of course. Tell your bank your status has changed before the next rent arrives rather than after.

The tax picture, in one view

Rent paid to an NRI landlord is taxed at source. As of August 2026 the renter must deduct under Section 195 at 30% plus 4% cess, an effective rate of about 31.2%. A surcharge sits on top of that only where your total Indian income for the year is above Rs 50 lakh, not the rent alone. There is no threshold and no exempt slice. The deduction applies from the first rupee.

A naming note that applies to this whole page: from 1 April 2026 the Income-tax Act 2025 replaced the 1961 Act, and section and form numbers changed with it. The 1961 names are used here, Section 195 among them, because that is what renters, landlords and most accountants still say. The duties continue unchanged under the new Act, where deduction on payments to non-residents sits in Section 393, and an accountant will map the rest.

That figure is what is withheld. It is not what you owe. Rental income gets a 30% standard deduction, municipal taxes and home loan interest are deductible, and slab rates then apply. For most owners the real liability lands well under 31.2%, and the excess comes back as a refund when the Indian return is filed. If the same income is taxed where you live, a double tax treaty (DTAA) will generally let you credit the Indian tax paid against it.

There is also a way to stop the over-withholding at source instead of reclaiming it a year later. That is a lower or nil deduction certificate under Section 197, applied for with Form 13.

Rates and rules move. The figures above are the position as of August 2026, and they are worth re-checking before you plan around them. Why the rate is 31.2%, and how the refund works.

Repatriation, in plain terms

Money in an NRO account is not stuck, but it is capped. Up to USD 1 million per financial year may be repatriated out of an NRO account. Rent is current income, so it is repatriable once the tax on it has been dealt with. Your bank will ask for Form 15CA, and for Form 15CB signed by a chartered accountant in the cases that need one.

What your renter has to do

The deduction is your renter's legal obligation. It is not yours, and it is not an app's. As of August 2026 a renter paying rent to an NRI landlord has to:

• obtain a TAN, which is a separate registration from a PAN;
• deposit the deducted tax by the 7th of the following month;
• file Form 27Q, the quarterly return for payments to non-residents;
• issue you Form 16A, which is your evidence that the tax reached the department;
• where money moves abroad, file Form 15CA, with Form 15CB from a chartered accountant where the rent is above Rs 5 lakh a year. Whether these attach to each rent payment into an Indian account, or only to a later transfer out of India, is a point accountants read differently, so have one call it for your case.

Failing to deduct is not a small matter. Section 271C carries a penalty equal to the amount that should have been deducted, plus interest.

Most renters have never met any of this, because renting from a resident landlord looks nothing like it. That runs under Section 194-IB, bites only above Rs 50,000 a month, and is charged at 2%, the rate since 1 October 2024, against a PAN with no TAN needed. Setting out the difference in writing at the start of the tenancy costs less than arguing about it in the third month.

If 31.2% every month is too much to carry

You can apply under Section 197, using Form 13, for a certificate that sets a lower rate or nil. If one is issued, your renter deducts at that rate instead. What Form 13 is, and what it changes.

Where Door-Let fits

Door-Let is a system of record. It records what was charged and what arrived, per unit and per month, so that at the end of a year you have a clean account of the rent itself to hand your chartered accountant. It does not deduct tax, does not file anything, does not chase a renter for a TAN, and does not make anyone compliant. The deducting stays with your renter and the return stays with you.

Related

TDS on rent paid to an NRI landlord, explained sets out the 31.2% deduction and the refund route. Form 13 and the Section 197 certificate covers the application that lowers the rate. Both sit under the guides index.

If something here does not match your situation, write to support@doorlet.in.