Paying tax in India on rental income from property . . .
There is no limit on the number of residential or a commercial property (other than agricultural land/farmhouse plantation property) that NRIs can buy. There is however one important taxation impact that is associated with owning more than one property in India the NRIs should be aware of. As per Indian Income Tax Act, there is no income tax charged on properties that are self occupied. If a person owns more than one property, then as per Indian tax rules, only one of these properties can be claimed as being self occupied. The second property in such a case cannot be claimed as self occupied, even if the owner keeps the property for their own use. The The other one, whether you rent it out or not, will be deemed to be given on rent and in such cases, the rent will have to be calculated as per certain valuations prescribed under the income tax rules and the owner would have to pay tax on this deemed rental income.Tax on inherited property
In a situation where you become the owner of a second property by way of inheritance, the same rule will apply and you would have to pay tax on the deemed rental income on the inherited property, whether you rent it or not.Saving Taxes on Rental Income
• 1/3rd of rent can be deducted as maintenance • Saving Taxes on Rental Income • 30% of rental income can be claimed as maintenance • Any property taxes paid can be claimed as deduction • Interest paid on property loan can be claimedSave tax on second property you own
For second property, you may be able to claim full interest paid for the EMI* of second house. As per tax laws, you can claim full deductions for the amount paid as interest on loan for second house whereas for the first house you can claim up to 1.5 lakh Rupees in interest, however for your second house you can claim full amount of interest. *EMI refers to Equity Monthly Installment, This includes principal and interest.
Disclaimer: Information provided is for general knowledge only and should not be deemed to be professional advice. For professional advice kindly consult a professional
accountant, immigration advisor or the Indian consulate. Rules and regulations do change from time to time. Please note that in case of any variation between what has
been stated on this website and the relevant Act, Rules, Regulations, Policy Statements etc. the latter shall prevail.
© Copyright 2006 Nriinformation.com
Calculating capital gains on sale of property in India
Purchasing Property in India . . . Check documents!
NRI - OCI - PIO Guide & Information
NEW!
EDITION
Available Worldwide
UPDATED
FOR
2023-24
Paying tax in India on rental
income from property . . .
There is no limit on the number of residential or a commercial property (other than agricultural land/farmhouse plantation property) that NRIs can buy. There is however one important taxation impact that is associated with owning more than one property in India the NRIs should be aware of. As per Indian Income Tax Act, there is no income tax charged on properties that are self occupied. If a person owns more than one property, then as per Indian tax rules, only one of these properties can be claimed as being self occupied. The second property in such a case cannot be claimed as self occupied, even if the owner keeps the property for their own use. The The other one, whether you rent it out or not, will be deemed to be given on rent and in such cases, the rent will have to be calculated as per certain valuations prescribed under the income tax rules and the owner would have to pay tax on this deemed rental income.Tax on inherited property
In a situation where you become the owner of a second property by way of inheritance, the same rule will apply and you would have to pay tax on the deemed rental income on the inherited property, whether you rent it or not.Saving Taxes on Rental Income
• 1/3rd of rent can be deducted as maintenance • Saving Taxes on Rental Income • 30% of rental income can be claimed as maintenance • Any property taxes paid can be claimed as deduction • Interest paid on property loan can be claimedSave tax on second property you own
For second property, you may be able to claim full interest paid for the EMI* of second house. As per tax laws, you can claim full deductions for the amount paid as interest on loan for second house whereas for the first house you can claim up to 1.5 lakh Rupees in interest, however for your second house you can claim full amount of interest. *EMI refers to Equity Monthly Installment, This includes principal and interest.
Disclaimer: Information provided is for general knowledge only and should not be
deemed to be professional advice. For professional advice kindly consult a professional
accountant, immigration advisor or the Indian consulate. Rules and regulations do
change from time to time. Please note that in case of any variation between what has
been stated on this website and the relevant Act, Rules, Regulations, Policy Statements
etc. the latter shall prevail.
© Copyright 2006 Nriinformation.com
