How India taxes the rent you earn as a non-resident

Since 1 April 2026 the Income-tax Act, 2025 governs rental income. For an NRI owner, the key difference from a resident landlord is that tax is taken at source before the money reaches you.

This guide describes the mechanics so that you can have an informed conversation with your chartered accountant. It is not tax advice. Residence status, treaty relief in your country of residence and the way short-stay income is classified can change your final liability considerably.

Tax deducted at source: the non-resident rule

The Income-tax Act, 2025 treats rent paid to residents and to non-residents differently. The department's own FAQ on TDS on rent states that deduction under section 393(1) applies only where rent is payable to a person resident in India. Payments to non-residents fall under section 393(2): where any sum chargeable to tax under the Act, other than salary, is paid to a non-resident, any person responsible for paying it must deduct tax at the rates in force. These provisions replace section 195 of the 1961 Act.

Two practical consequences follow:

• An individual tenant paying rent to an NRI landlord is a deductor too. The thresholds and simplified rules designed for resident landlords do not relieve them.
• The payer must deduct before paying you and deposit the amount with the government. You receive the net figure and claim credit for the tax when you file.

For guest bookings, who counts as the payer depends on how money flows: platform to owner, guest to owner, or through a manager. Settle this with your accountant before the first payout rather than after the first notice.

Asking for a lower deduction

Deduction at the rates in force can exceed the tax you eventually owe, especially once expenses and deductions are counted. Section 395 of the Act allows a payee to apply to the Assessing Officer for a certificate authorising deduction at a lower rate or none at all. The application needs figures and supporting documents, so it is typically prepared by your chartered accountant.

House property or business income?

Letting a home is normally taxed under the head "income from house property". Under section 22 of the 2025 Act, that head allows a standard deduction of 30% of the annual value, plus interest on borrowed capital within the limits the section sets. Short-stay letting with services such as cleaning, linen and guest support raises the question of whether the income is better treated as business income, with different rules for expenses. There is no universal answer; it depends on facts, and it is precisely the point on which to take professional advice.

GST on accommodation

Short-stay accommodation is a taxable service. Following the 56th GST Council, from 22 September 2025 accommodation up to ₹7,500 per unit per day attracts 5% GST without input tax credit, and 18% above that value. Whether you personally must register for GST, and how platforms collect it, depends on turnover and the booking channel. Your accountant should confirm your position.

Filing and records

• Keep every TDS certificate your payers issue and check them against your annual tax statement.
• Keep invoices for cleaning, repairs, utilities, society charges and management fees.
• Record the dates you spend in India each year; residence status depends on them.
• Tell your accountant in your country of residence about Indian income. Double taxation treaties may give relief, but only if claimed correctly.

What we provide

Hexuvium does not give tax advice. We give your accountant what they need: a monthly and annual statement per stay, fees, costs, taxes collected or withheld on the platforms we manage, and the supporting invoices. Clean figures cost less to audit and make a lower-deduction application easier to support.