NRI Landlords Keep These in Mind While Renting Out Property India
Oct 10, 2017 Home Trading Steps
Indian real estate market witness lot of investment from NRIs every year. They usually invest here to have a home away from home or when they plan to come back they have a place to settle or just for investment purpose for earning some extra moolah in term of rental income.
So if you are an NRI and have bought a property in India and plans to put it on rent then here are some tips for you:
1) If you have a property in India, which is on rent then you have to pay the tax generated from the rental income, despite the fact in which country you stay.
2) NRIs don’t have to pay tax on the entire rental income, there are some deductions to consider. In order to calculate the deductions from your rental income follow these pointers:
You need to deduct 30 percent from the taxable value
Consider the taxes to be paid to the municipal authority in regard to the respective rented property
Also, consider the interests that you have paid for the construction or repair of the property.
3) Depending on the NRIs residential status, some NRI’s might have to pay taxes in both the countries for the rental income that they have earned. Countries like the Middle East are tax free, so people living there need not to worry. Whereas countries like United States and India have double taxation Avoidance Agreement. But remember, the income you generate in India must be deposited in the Non-Resident Ordinary (NRO) account
4) If an NRI, have taken a home loan to buy a property in India, then he or she is eligible to avail tax deduction under the section of 80c up to Rs 1.50 lakh. This can be deducted from the total income earned in India in which rental income is also gets included.
5) It is mandatory for even NRIs to file income tax return in India. But if the income does not exceed over Rs 2.40 lakh per year then it is not mandatory to file the returns.
So if you are an NRI and have bought a property in India and plans to put it on rent then here are some tips for you:
1) If you have a property in India, which is on rent then you have to pay the tax generated from the rental income, despite the fact in which country you stay.
2) NRIs don’t have to pay tax on the entire rental income, there are some deductions to consider. In order to calculate the deductions from your rental income follow these pointers:
You need to deduct 30 percent from the taxable value
Consider the taxes to be paid to the municipal authority in regard to the respective rented property
Also, consider the interests that you have paid for the construction or repair of the property.
3) Depending on the NRIs residential status, some NRI’s might have to pay taxes in both the countries for the rental income that they have earned. Countries like the Middle East are tax free, so people living there need not to worry. Whereas countries like United States and India have double taxation Avoidance Agreement. But remember, the income you generate in India must be deposited in the Non-Resident Ordinary (NRO) account
4) If an NRI, have taken a home loan to buy a property in India, then he or she is eligible to avail tax deduction under the section of 80c up to Rs 1.50 lakh. This can be deducted from the total income earned in India in which rental income is also gets included.
5) It is mandatory for even NRIs to file income tax return in India. But if the income does not exceed over Rs 2.40 lakh per year then it is not mandatory to file the returns.
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