Ready Reckoner
READY RECKONER #12 · PROPERTY INCOME

I receive rent from my Indian property. Where should it go — and can I take it abroad?

Rent, tax and repatriation are connected, but they are not the same question.

30-SECOND ANSWER

NRO is the straightforward account for Indian rent — but it is not the only permitted possibility.

RBI treats rent as current income. It can be credited to NRO. RBI also permits current income such as rent to be credited to NRE when the authorised dealer is satisfied that it remains repatriable and applicable Indian tax has been deducted, paid or provided for.

Think of rent in 3 steps

1. Receiving the rentNRO is designed to receive legitimate dues in India. Rent is a common example. Do not continue using an old resident savings account after becoming non-resident merely because the tenant already has those bank details.
2. Paying Indian taxRental income from Indian property can remain taxable in India even when you live abroad. The tax computation is not simply “monthly rent × tax rate”; house-property rules provide their own computation and deductions.
3. Sending the rent abroadRBI permits remittance of current income such as rent outside India, subject to applicable tax compliance and the authorised dealer's documentation requirements.

Can rent go directly to NRE?

Yes, potentially — so “Indian rent must always go only to NRO” is too simplistic.

RBI says current income such as rent, dividend, pension and interest can be credited to NRE provided the authorised dealer is satisfied about the nature of the income and that applicable income tax has been deducted, paid or provided for. In practice, confirm your bank's documentation/process before changing the rent-credit instruction.

What about TDS by the tenant?

If the landlord is non-resident, the tenant should not blindly apply a resident-landlord rent rule just because that is what they used earlier. From 1 April 2026, the Income-tax Act, 2025 withholding provisions apply to payments made or credited from that date, and the Act has a separate table for payments to non-residents. The exact withholding position should be checked for the payment and circumstances.

Practical point:

Tell the tenant when your residential status changes and involve your CA early. A tenant deducting under the wrong provision can create unnecessary correction/refund work later.

A simple example

You work in Dubai and own a flat in Kochi that earns ₹35,000 rent each month.

Ask: Which non-resident account should receive it? → Has the tenant applied the correct withholding treatment? → What is the taxable house-property income after applicable deductions? → Do you need the rent for expenses in India or want to remit it abroad?

Keep these records

✓ Rent agreement and tenant details
✓ Bank trail for rent receipts
✓ TDS certificates/credits where applicable
✓ Municipal/local taxes and eligible loan-interest records
✓ Income-tax return and tax-payment records
✓ Remittance documents if taking the income abroad

Verify the rules yourself

RBI — NRE/NRO permitted credits → RBI — Remittance of current income including rent → Income Tax — TDS rules under the Income-tax Act, 2025 →

Last verified: 17 August 2026. Exact tax and withholding depend on current law and individual facts. Check with your CA/authorised dealer before changing payment or remittance arrangements.

Your tenant pays rent every month. Is the money flowing through the right route?

Tell Amrutha your rental amount, current account used, country of residence and whether you need the money in India or abroad.

Check my rental-money route →