Frequently Asked Questions
Yes. If your property is leased to a company, LLP, or any GST-registered entity, 18% GST applies under the Reverse Charge Mechanism — paid directly by the tenant to the government. The nature of your tenant, not just your property, determines your tax position.
For NRI landlords, TDS under Section 195 applies at 31.2% significantly higher than the 10% applicable to resident Indian landlords. Critically, this applies regardless of the rent amount.
All landlords resident and NRI alike are automatically entitled to a 30% deduction on net annual rental value before tax is calculated. No receipts or documentation required.
Yes. Home loan interest on a rented property is generally deductible against rental income.
Yes, subject to FEMA compliance and applicable banking and tax requirements. The process requires proper documentation and structuring ideally established before the first lease is signed rather than managed retrospectively.
If rented by an individual for personal residence: No GST applies.
Yes. If a residential property is rented to a company, LLP, partnership firm, or GSTregistered business entity,18% GST applies under Reverse Charge Mechanism (RCM).
Under RCM, the landlord usually does not charge GST. The tenant entity pays GST directly to the government.
Yes. If residential premises are used commercially, GST exemption generally does not apply.
Yes, usually at 18% GST.
Usually available for office/commercial use. Often disputed for employee accommodation, guest houses, and director residences.
For companies, LLPs, and firms, TDS under Section 194I generally applies at 10%.
If monthly rent exceeds Rs. 50,000, TDS under Section 194IB may apply at 2%.
Refundable security deposits are usually not taxable. Non-refundable deposits may become taxable.
It depends on the lease structure and whether maintenance is included in rent.
For 11-month agreements, stamp duty is typically Rs. 1100. Longer leases depend on duration and rent value, typically 2% on average annual rent for leases upto 5 yrs. Annual rent is calculated by adding the escalation during the lease period.
Registration is usually mandatory for leases exceeding 11 months.
Rental income is taxed under ‘Income from House Property’.
Landlords automatically receive a 30% deduction on net annual rental value.
Yes. Home loan interest for rented property is generally deductible.
Salaried employees may claim HRA exemption. Self-employed individuals may claim Section 80GG deductions.
Yes, in many practical situations.
No. HRA exemption is generally available only under the old tax regime.
Corporate leasing may trigger GST under RCM, TDS, and additional compliance burden.
When rent is paid to an NRI landlord, TDS under Section 195 applies and rates can be significantly higher, currently 31.2%.
No. Section 195 may apply irrespective of the rent amount.
GST implications are generally based on tenant type and usage, not NRI status.
Yes. Rental income from Indian property is taxable in India even if the owner is an NRI.
Yes. NRIs can generally claim municipal taxes, 30% standard deduction, and eligible home loan interest deductions.
Yes, subject to FEMA rules and applicable banking/tax compliance.
