Generally,people choose byui housing as it offers contemporary apartments for both men and women.But before that we should also be aware of the fact that a lot of changes takes place when a person’s status changes from a resident Indian to a non-resident Indian. Not only in terms of the tag NRI but also from the taxation point of view. People who were earlier living in India generally have properties which they let out to gain some extra income. They do not sell the properties in India because the property is a favourite Indian asset class and one of the main reasons for this is its ability to generate regular cash flows through rent. So people prefer to keep their properties instead of selling them when they start residing in other countries.

There are some income tax provisions related to the rental income earned by NRIs in India which are as follows:

A person making a remittance (a payment) to a Non-Resident Indian has to submit Form 15CA. This form has to be submitted online. In some cases, a certificate from a chartered accountant in Form 15CB is required before uploading Form 15CA online. In Form 15CB, a CA certifies details of the payment, TDS rate, and TDS deduction as per Section 195 of the Income Tax Act, if any DTAA (Double Tax Avoidance Agreement) is applicable, and other details of nature and purpose of the remittance.

Form 15CB is not required when:                          

Remittance does not exceed Rs 50,000 (single transaction) and Rs 2,50,000 (in total in a financial year). Only Form 15CA has to be submitted in this case.

If lower TDS has to be deducted and a certificate is received under Section 197 for it or lower TDS has to be deducted in order of the Assessing Officer. Neither is required if the transaction falls under Rule 37BB of the Income Tax Act, where it lists 28 items.

In all other cases, if there is a remittance outside India, the person who is making the remittance will take a CA’s certificate in Form 15CB and after receiving the certificate submit Form 15CA to the government online. You can see how businesses manage finances as explained by Archimedia Accounts.

Example

Mr Kumar pays a monthly rent of Rs.100000 to Mr Raj who is an NRI. Mr Kumar a tenant must remember to deduct TDS at the rate of 30.9% or Rs.30900 before transferring the rent to Mr Raj’s account. Mr Kumar must also prepare Form 15CA and submit it online to the Income Tax Department.

IMPORTANT POINTS TO REMEMBER:

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