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Quick answer: renting an Indian property from a non-resident individual brings specific TDS duties for the tenant. The tenant has to deduct tax at the rates in force, which for an ordinary individual landlord works out to 31.2% of the rent (30% plus 4% cess), from the first rupee, and the tenant needs a TAN. This guide explains the deduction, the payment deadlines and the reporting, alongside the landlord’s job of checking the TDS credit and filing the right return. It is about rent. For tax on a sale, see the NRI property-sale TDS guide.
This is general information and not tax advice. The Income-tax Act, 2025 applies from 1 April 2026, and section and form numbers changed with it. Have a chartered accountant confirm the position for your case. This guide is independent and has not been reviewed by a lawyer.
Check the landlord’s tax residency first
A foreign address alone does not make a landlord non-resident for Indian tax. The test is the landlord’s status under the Income-tax Act for the relevant period, which depends on days spent in India. Ask the landlord for a written declaration of status, and revisit it if their situation changes during the tenancy. If you are unsure, take advice before you deduct, or before you decide not to deduct.
A worked example
| Illustrative monthly calculation | Amount |
|---|---|
| Gross rent | Rs 50,000 |
| TDS at 31.2% | Rs 15,600 |
| Net rent paid to the landlord | Rs 34,400 |
Assumptions: an individual non-resident landlord, no surcharge, no lower or nil deduction certificate, and a rent agreed as a gross amount. If the agreement says the landlord must receive Rs 50,000 net, the tenant has to gross the rent up, so settle this in the agreement. The 30% rate and 4% cess come from the Finance Act schedule for the relevant category of non-resident income, and a surcharge may apply at higher incomes. This withholding is not necessarily the landlord’s final tax for the year.
Which rules apply to which period
| Earlier of credit or payment | Rules |
|---|---|
| On or before 31 March 2026 | Income-tax Act, 1961: section 195 for the deduction, section 197 and Form 13 for a lower certificate, Form 27Q for the quarterly statement and Form 16A for the certificate. |
| On or after 1 April 2026 | Income-tax Act, 2025: section 393(2) (Table serial number 17) for the deduction, section 395(1) and Form 128 for a lower certificate, Form 144 for the quarterly statement and Form 131 for the certificate. |
The test is the earlier of the credit and the payment. Rent credited in March 2026 and paid in April 2026 does not automatically move to the new Act. Keep the old names in mind because older documents and bank letters still use them. Forms and mapping are listed on the Income Tax Department site and in the Form 128 FAQ.
Tenant checklist
- Get a TAN. The simplified route for individual tenants paying resident landlords does not cover payments to a non-resident.
- Deduct at the rate in force, with no minimum threshold. Do not use the resident-landlord rules. Those have different payer categories, thresholds and reporting requirements.
- Deposit on time. For an ordinary non-government tenant, tax deducted from April to February is generally due by the 7th of the following month, and tax deducted in March by 30 April, subject to exceptions and notified extensions.
- File the quarterly statement and issue the certificate. The certificate is generated on TRACES after the statement is processed.
- Consider reporting on a payment abroad. The tenant’s rent payment and the landlord’s later transfer overseas are two separate questions. Ask a chartered accountant which declaration, if any, applies to your payment. Paying into an NRO account in India does not by itself remove the TDS duty, since the duty attaches to a taxable payment to a non-resident.
Compliance calendar
| Quarter | Form 144 statement | Form 131 certificate |
|---|---|---|
| April to June | 31 July | 15 August |
| July to September | 31 October | 15 November |
| October to December | 31 January | 15 February |
| January to March | 31 May of the following year | 15 June of the following year |
These dates follow the department’s form guidance and can change by notification, so check them each year.
If the tenant is late or does not deduct
| Default | Interest |
|---|---|
| Tax not deducted on time | 1% per month or part of a month, from when it should have been deducted until it is deducted |
| Tax deducted but deposited late | 1.5% per month or part of a month, from deduction until it is paid |
Interest, late filing fees and penalties are different things, so ask a chartered accountant what applies if you have missed a payment.
Landlord checklist
- Lower or nil deduction. Form 128 is the application. It is not the certificate. The tenant should apply the concession only after receiving the issued certificate, and should check its validity period, the payer and payment it covers, and its limits. An acknowledgement of the application is not approval. Whether an older certificate still helps depends on its terms and the transition rules, and an expired certificate cannot be reused.
- Treaty documents. A tax residency certificate and Form 41 (formerly Form 10F) may be asked for. Rent from Indian property is usually taxed in India, so do not expect a treaty to cut the withholding.
- Check the credit and file a return. Match the deduction against Form 26AS or AIS, show the rent, claim the deductions the law allows and claim credit for the TDS. A refund arises only if the credit is more than the final tax.
- Keep records: the agreement, receipts, certificates and the tenant’s TAN.
Who does what
| Task | Tenant | Owner |
|---|---|---|
| Get a TAN | Yes | No |
| Deduct and deposit the tax | Yes | No |
| File the quarterly statement | Yes | No |
| Issue the certificate | Issues it | Receives it |
| Apply for a lower deduction certificate | No | Yes, before the rent is paid |
| Treaty documents | No | Provides them if claiming |
| File the return and claim credit | No | Yes |
Common mistakes
- Using the resident-landlord rules for a non-resident.
- Skipping the deduction because the rent is small.
- Deducting on the rent net of the owner’s standard deduction, which the owner claims only in the return.
- Not getting a TAN, or depositing late.
- Using the old form numbers for rent credited or paid on or after 1 April 2026.
- Treating a lower deduction application as an approval.
Questions that come up
| Situation | Short answer |
|---|---|
| Rent below Rs 50,000 a month | There is no threshold for a non-resident landlord, so the deduction applies from the first rupee. |
| One co-owner is resident and another is non-resident | The non-resident share is treated separately. Ask a chartered accountant how to split it. |
| The landlord changes residency during the tenancy | The treatment follows their status for the period. Take advice at the time of the change. |
| The tenant already paid without deducting | Speak to a chartered accountant about paying the tax and the interest, and tell the landlord. |
| The TDS credit is missing from the landlord’s records | Ask the tenant for the certificate and confirm the statement was filed and processed. |
The more complex scenarios above are short pointers, so get them checked before you act. Owners who let a flat can read the rental property owner guide, and tenants can see the guide to renting in Navi Mumbai. If someone is handling the letting for you, see the NRI power of attorney guide, and use the property lawyer checklist to check what the agreement should cover. If you also sell, see the NRI property-sale TDS guide. Note that the guide to sending property sale proceeds abroad covers sale proceeds, not rent.
Frequently Asked Questions
Is TDS deducted on rent paid to an NRI landlord?
Yes. The tenant has to deduct tax at the rates in force, with no minimum threshold. The resident-landlord provisions do not apply.
What is the rate of TDS on rent paid to an NRI?
For an ordinary individual landlord it is 30% plus 4% cess, which is 31.2%, with no surcharge and no lower deduction certificate assumed. A surcharge may apply at higher incomes.
Does the tenant need a TAN?
Yes. The simplified route for resident landlords is not available.
What interest applies if the tenant is late?
Tax not deducted on time carries interest at 1% per month or part of a month. Tax deducted but not deposited on time carries 1.5% per month or part of a month.
Can the landlord reduce the deduction?
Yes, by applying for a lower or nil deduction certificate on Form 128 and giving the tenant the issued certificate before the rent is paid.
Is TDS the landlord’s final tax?
Not necessarily. It is a credit against the final tax on the landlord’s return, and a refund arises only if the credit is more than the tax.
Which sections and forms apply from April 2026?
Section 393(2) replaced section 195, section 395 and Form 128 replaced section 197 and Form 13, Form 144 replaced Form 27Q and Form 131 replaced Form 16A. The earlier of credit or payment decides which period applies.
Sources and review
| Point | Source |
|---|---|
| Section, form and period mapping | Income Tax Department and Form 128 FAQ |
| Practitioner explanations | TaxTMI and Tax2win |
Reviewed on 24 October 2026 against the Income Tax Department guidance named above. Surcharge, the treatment of co-owners and the need for a remittance declaration on rent differ by case, so confirm them with a chartered accountant.
The featured image is an AI generated illustration made for this guide, and not a photograph.
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