Q.787 Lower Rental income for Tax purposes - Use Allowed Deductions
Question: Dear Sir, Just to know to be specific for overseas rental income in India in regards to taxation in India and abroad? I have seen your website which provide useful information however just to know as this is always a mystry how to handle the situation where NRI's operating normal saving accounts and to deposit the rent via Indian properties. Scenario is now changed and the rental income jumped to the money where will have to pay the tax in India however due to the non-awareness still normal account is being used though NRE/NEO account exists. Also recent buy and income in the property - these al questions now a headache and need to resolve the long pending issue. Is there any good document and easy to understand how this is going to impact us as an individual being an NRI. Your help much appreciated. Regards, Arvind Jain Answer: If your question relates to a situation where rental income has now jumped to an amount that is over the tax free slabs in India. I can offer a comment on this topic: The current tax free slab for an individual is Rupees 2, 50, 000. Income up to this amount is tax free. In case a person has income in India that comes from rental income for his/her property and the rental income turns out to be more than the tax free slab. They would have to file a tax return and pay the applicable tax. However, there are some standard deductions allowed that can actually help reduce the total amount of rental income received for tax purposes. For instance 30% standard deduction can be deducted for repairs etc. regardless of the money spent. Municipal taxes paid on the property can also be deducted. Such deductions are legally allowed and reduce your rental income for tax purposes. Any excess income after utilizing the deductions is needless to say taxed according to applicable income tax rates in effect. For more detailed information kindly see an article on this website titled ‘Save tax on Rental Income in India when Rental Income over allowed tax free amount’ To view the article use the link: http://nriinformation.com/articles4/rental_incometax.htm or click HERE
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Q.787 Lower Rental income for
Tax purposes - Use Allowed
Deductions
Question: Dear Sir, Just to know to be specific for overseas rental income in India in regards to taxation in India and abroad? I have seen your website which provide useful information however just to know as this is always a mystry how to handle the situation where NRI's operating normal saving accounts and to deposit the rent via Indian properties. Scenario is now changed and the rental income jumped to the money where will have to pay the tax in India however due to the non-awareness still normal account is being used though NRE/NEO account exists. Also recent buy and income in the property - these al questions now a headache and need to resolve the long pending issue. Is there any good document and easy to understand how this is going to impact us as an individual being an NRI. Your help much appreciated. Regards, Arvind Jain Answer: If your question relates to a situation where rental income has now jumped to an amount that is over the tax free slabs in India. I can offer a comment on this topic: The current tax free slab for an individual is Rupees 2, 50, 000. Income up to this amount is tax free. In case a person has income in India that comes from rental income for his/her property and the rental income turns out to be more than the tax free slab. They would have to file a tax return and pay the applicable tax. However, there are some standard deductions allowed that can actually help reduce the total amount of rental income received for tax purposes. For instance 30% standard deduction can be deducted for repairs etc. regardless of the money spent. Municipal taxes paid on the property can also be deducted. Such deductions are legally allowed and reduce your rental income for tax purposes. Any excess income after utilizing the deductions is needless to say taxed according to applicable income tax rates in effect. For more detailed information kindly see an article on this website titled ‘Save tax on Rental Income in India when Rental Income over allowed tax free amount’ To view the article use the link: http://nriinformation.com/articles4/rental_incom etax.htm or click HERE
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