NRI Rent TDS Calculator

What is TDS on rent paid to an NRI landlord?

When you (the tenant) pay rent to an NRI landlord, you must deduct TDS (Tax Deducted at Source) under Section 195 of the Income Tax Act. The standard rate is 30% + 4% cess = 31.2%. Unlike Section 194-IB (for resident landlords), there is no minimum monthly rent threshold — TDS applies from the first rupee.

Is there any minimum rent threshold before TDS kicks in?

No. For NRI landlords under Section 195, TDS applies on every rupee of rent paid. Contrast this with Section 194-IB (resident landlords), which only applies when monthly rent exceeds ₹50,000.

What does the tenant need to do step by step?

1. Obtain a TAN (Tax Deduction Account Number) from NSDL — a 10-digit alphanumeric number. 2. Deduct TDS at 31.2% each month. 3. Deposit the TDS via Challan ITNS 281 by the 7th of the following month. 4. File Form 27Q (quarterly TDS return for non-residents) with the deductee's PAN or OECD-format details. 5. Issue Form 16A (TDS certificate) to the NRI landlord after each quarter.

Can the NRI landlord get TDS deducted at a lower rate?

Yes. The landlord can apply to the Income Tax Assessing Officer for a Section 197 lower/nil deduction certificate. If granted, the tenant can deduct at the lower rate specified. The landlord typically does this when their effective tax rate (after treaty relief or deductions) is lower than 31.2%.

How does a Double Taxation Avoidance Agreement (DTAA) help?

If India has a DTAA with the landlord's country of residence, the applicable tax rate on rental income may be lower than 31.2%. The landlord must submit their Tax Residency Certificate (TRC) and Form 10F to claim DTAA relief. The DTAA rate applies to the base tax, not to cess. The tenant should still deduct TDS at 31.2% unless the landlord provides a valid TRC + lower-deduction certificate.

What happens if the tenant doesn't deduct TDS?

The tenant becomes a 'defaulter' under the Income Tax Act. Consequences: interest under Section 201(1A) at 1% per month for failure to deduct, or 1.5% per month for deducting but not depositing; penalty under Section 271C equal to the amount of TDS not deducted; and prosecution under Section 276B with imprisonment up to 7 years. The rent expense may also be disallowed as a deduction.