Your Tenant Deducted 31.2% TDS. Here's Why Filing an Indian Tax Return Can Get Some of It Back

NRI with a rented flat in Mumbai? TDS is cut at 31.2% on gross rent, but tax is due only on net income after a 30% deduction. Filing an ITR can recover the gap.

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If you're an NRI with a rented flat in Mumbai, your tenant deducts TDS at 30% plus 4% cess, which is 31.2% before any surcharge, on the full rent. Many owners treat that as the end of it. It often isn't, because the TDS is cut on gross rent while the tax you actually owe is on net rental income.

How is rental income taxed in India?

Rent is taxed as income from house property. The Income-tax Act, 2025 keeps the familiar structure (TaxHeal):

Start with the annual value, which for a let-out flat is broadly the rent, less property tax you've paid to the municipality.
Deduct a flat 30% standard deduction of that annual value, whatever you actually spent on repairs.
Deduct interest on a home loan taken to buy, build or repair the flat.

A worked example

Say your flat earns ₹60,000 a month and you paid ₹25,000 in BMC property tax this year, with no home loan.

Rent for the year: ₹7,20,000
TDS deducted by the tenant at 31.2%: ₹2,24,640
Annual value after property tax: ₹6,95,000
Less 30% standard deduction: taxable rental income ₹4,86,500

Your actual tax depends on your total Indian income and which tax regime applies, but on ₹4.865 lakh of income it is very likely to be far less than ₹2.25 lakh. The difference comes back only if you file a return and claim it.

TDS is cut on your gross rent. Tax is due on your net income. The gap only comes back if you file.

What do I need to file?

The TDS certificates from your tenant, and a check that the TDS shows against your PAN in Form 26AS / AIS. If it doesn't, read what to do when rent TDS doesn't match.
Proof of property tax paid.
Home loan interest certificate, if you have a loan.
Details of other Indian income, such as NRO interest.

Can I avoid the high TDS in the first place?

Yes. You can apply for a lower TDS certificate under section 395 (Form 128), so your tenant deducts at a rate closer to your real tax. It needs to be in place before the payments it covers. I've explained it in the context of a sale in this post; the same route applies to rent.

What about sending the rent abroad?

Rent goes into your NRO account. After tax, you can repatriate it with the bank's remittance forms and usually a CA's certificate. My earlier guide on NRI rental income tax and repatriation covers this.

How we help

For flats we manage, the TND app tracks rent and TDS month by month, and we follow up on TDS certificates every quarter with company tenants. In one BKC case on our Owners' Wall, we reconciled two financial years of rent and TDS line by line so the owners' accountant had clean figures to file with.

Frequently asked questions

Do NRIs have to file an income tax return for rental income in India?

If your Indian income is above the basic exemption limit, yes. Even below it, filing is how you claim a refund of excess TDS.

What is the standard deduction on rental income?

30% of the annual value, after deducting municipal property tax you've paid.

Can I deduct society maintenance from rental income?

No. Maintenance isn't separately deductible; the 30% standard deduction is meant to cover upkeep.

Related reading

Want a second pair of eyes on your rent and TDS figures? Book a call.

Warmly,
Yanik

General information, not tax advice. Your CA should prepare your return.

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