IS TDS U /S 195 TO BE DEDUCTED, IF HOUSE RENT IS PAID BY SALARIED PERSON TO NRI.
2 Replies
S. Shiroor
(Others)
(1207 Points)
Replied 20 August 2015
Rent & NRI
There is no separate rate prescribed for TDS on rent paid to NRIs. Therefore, this would fall under the category of other income and are subject to a TDS of 30 per cent. Just like in the case of capital gains on assets, the payer of the rent is responsible for deducting the tax at source. The same process of getting a TAN and issuing a TDS certificate applies in this case too.
CA Sukriti Jain
(Senior, EY)
(1184 Points)
Replied 20 August 2015
ashwini, your case is payment of rent to NRI. First, lets talk who is a NRI.
Non Resident Indians under FEMA means, -
(i) An Indian Citizen, who stays in india for more than 182 days, but also goes abroad for (a) employment/ carrying on business or (b) vacation outside India or (c) stays abroad under circumstances indicating an intention for an uncertain duration.
or
(ii) An Indian citizen, who stays in india for 182 days or lesser.
(iii) Non-resident foreign citizens of Indian Origin are treated on par with non-resident Indian citizens.
Person Residing Outside India (PROI) is the term used for a person who is not Resident in India. And he is treated as NRI, if he falls in any of the two points mentioned above.
ie a person can be a "NRI", as per FEMA,1999 , even if his stay in india is more than 182 days.
However as per Income tax act,1961 a person is considered "Resident" if his stay in india is 182 days or more.
ie a Non-resident is a person who stays in india for less than 182 days.
ie a person who is NRI as per FEMA, can be a Resident as per Income Tax Act.
Firstly you have to check the status of that person as per Income tax act. is that NRI is also a "non-resident" as per Income Tax act or not.?
If the said person is "resident" then deduct TDS @ 10%.
If the person is Non-Resident,
deduct TDS @ 30.9% (if Total Rent is rs.1crore or less)
@ 33.99% (if Total Rent paid is more than rs.1crore)
However, NRI may make an application to the AO, for deduction of TDS @ a Lower Rate. in such case, tax will be deducted at the reate specified by th AO.[FormNo. 13, 15C, 15D]
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