TDS on rent paid to an NRI landlord: rate, new section and calculator for FY 2026-27

TDS on rent paid to NRI calculator

Enter the monthly rent. The calculator shows the TDS to deduct each month and for the year, and what the landlord receives after TDS. It uses the FY 2026-27 rates from Part II of the First Schedule to the Finance Act, 2026.

What is the new section for TDS on rent paid to an NRI?

The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026. All the old TDS sections were merged into sections 392 and 393. Rent paid to a non-resident has no row of its own. It falls in the catch-all row of the section 393(2) table for payments to non-residents: Sl. No. 17, "any other sum chargeable" under the Act, at the "rates in force".

The government's transition FAQ says the old 1961 Act still applies where the rent was paid or credited on or before 31 March 2026. Anything paid or credited from 1 April 2026 falls under the new Act.

Who has to deduct TDS on rent paid to an NRI?

• The tenant, or whoever pays the rent. The section 393(2) table says "any person" who pays, so a salaried individual renting a flat is covered, not only companies.
• There is no ₹50,000 a month threshold. That limit is in section 393(1), which covers rent paid to residents (see TDS on rent above ₹50,000 a month). For an NRI landlord, TDS applies from the first rupee.
• It applies to homes and shops alike. Residential, commercial, a single room: if the landlord is a non-resident, TDS applies.
• A non-resident tenant is not exempt. A note to the section 393(2) table says the duty applies whether or not the payer lives or has a business in India.
• Check the landlord's residential status every year. Ask the landlord in writing whether they are a non-resident for the tax year, and keep their PAN. If they become resident, the rules for residents apply instead.

What is the TDS rate on rent paid to an NRI for FY 2026-27?

"Rates in force" means the rates in Part II of the First Schedule to the Finance Act, 2026. For a non-resident individual, rent falls under "the whole of the other income" at 30%. Section 3(16) of the same Act adds a 4% Health and Education Cess on the tax plus surcharge. Surcharge depends on the income paid or likely to be paid in the year.

Example: rent is ₹40,000 a month. TDS is ₹40,000 × 31.2% = ₹12,480. You pay the landlord ₹27,520 and deposit ₹12,480 with the government. Over 12 months that is ₹1,49,760 of TDS.

If the landlord has not given you a PAN, TaxHeal reads section 397(2) as "the higher of the rate in force or 20%". The rate in force is already 30%, so the deduction stays the same. Without a PAN, though, the landlord may not get credit for the tax, so ask for it before the first payment.

How does a tenant deduct and deposit TDS on rent to an NRI?

1. 1

   Get a TAN

   A tenant paying rent to an NRI needs a Tax Deduction Account Number (TAN) under section 397. The Finance Act, 2026 lets resident individuals skip the TAN from 1 October 2026 for some payments, such as rent to residents and buying property from a non-resident. Rent paid to a non-resident is not on that list, so you still need a TAN.

2. 2

   Deduct TDS when you pay or credit the rent

   Deduct at the time you pay or credit the rent, whichever is earlier (EximPe). Pay the landlord the rent minus TDS, ideally into their NRO account.

3. 3

   Deposit the TDS

   Pay the TDS online on the income tax e-filing portal using your TAN. Secondary sources (TaxHeal and others) give the deadline as the 7th of the next month, and 30 April for tax deducted in March.

4. 4

   File Form 144 every quarter

   Form 144 (earlier Form 27Q) is the quarterly statement of TDS on payments to non-residents. Secondary sources give the due dates as 31 July, 31 October, 31 January and 31 May.

5. 5

   Give the landlord Form 131

   TRACES generates Form 131 (earlier Form 16A) from your Form 144. According to the Form 131 FAQ, you must issue it within 15 days of the Form 144 due date. The landlord needs it to claim the TDS.

6. 6

   Ask a CA about Forms 145 and 146

   Forms 145 and 146 replaced Forms 15CA and 15CB for payments to non-residents. TaxHeal says a CA's Form 146 is needed when rent paid in the year is above ₹5 lakh and there is no lower-deduction certificate. Whether a tenant paying into an Indian NRO account must file them is a question for your CA.

Can the NRI landlord pay less than 31.2%?

Often the landlord's real tax on the rent is lower than 31.2%. Rent is taxed after deductions, such as municipal tax paid and the standard deduction, and the landlord's total Indian income may fall in a lower slab. The extra TDS comes back only as a refund after the landlord files a return. There are two ways to deduct less in the first place.

• Lower or nil deduction certificate (section 395). The landlord applies to the Income Tax Department with an estimate of their income. If it is accepted, the certificate states a lower rate, or no TDS, and the tenant deducts at that rate until the certificate expires. The Finance Act, 2026 also lets these certificates be issued after electronic checks. Secondary sources say the form is Form 128.
• Tax treaty (DTAA). Under most treaties, income from property can be taxed in the country where the property is (Rustomjee explains Article 6). So a treaty usually does not reduce Indian TDS on rent. Instead, the landlord claims credit in their home country for the Indian tax. Some websites say a Tax Residency Certificate lowers TDS on rent. Others say treaties rarely help for rent. Check the treaty for your landlord's country with a CA before you deduct less.

Without a valid certificate, the tenant must deduct the full rate. A letter from the landlord saying they will "pay their own tax" does not protect the tenant.

What does the NRI landlord need to do?

• Give the tenant your PAN and confirm in writing that you are a non-resident for the tax year.
• Take rent into your NRO account. The RBI's FAQ on accounts by non-residents lists current income, such as rent, as something you can send abroad from an NRO account once tax is paid or provided for.
• Collect your Form 131 every quarter and check the TDS shows against your PAN on the e-filing portal.
• File an income tax return in India. Report the rent and claim a refund if more TDS was deducted than you owe. ClearTax explains the refund route.
• Claim credit abroad. Your home country may tax the same rent. Ask your local adviser how to claim credit for the Indian tax.
• Consider a lower-deduction certificate if your real tax is well below 31.2%.
• For the rest of the job, from agreements to inspections, read how to manage property in India from abroad.

Keep a clean record of every rent payment

TDS is easier when every payment is on record: the month, the amount paid to the landlord and the date. Mismatches between what the tenant reports in Form 144 and what the landlord expects are a common cause of missing TDS credit.

Frequently asked questions