Owning a flat in Zirakpur while living in Canada, the UK, the USA or the Gulf can be one of your best long-term investments — Zirakpur sits on the Chandigarh–Delhi highway, draws steady tenant demand from professionals and families, and continues to add supply along PR-7, VIP Road and Patiala Road. But renting it out as an NRI involves a layer of tax and compliance that resident owners never deal with. This guide breaks down everything you need to know in 2026, in plain language.
1. Can an NRI rent out property in India?
Yes. There is no restriction on an NRI owning and renting out residential or commercial property in India (agricultural land is the main exception, which you generally cannot buy). You can let your Zirakpur flat to any tenant and earn rent — the key differences are how that rent is taxed and how the money reaches you abroad.
2. How rental income is taxed for NRIs
Rental income from a property located in India is taxable in India, regardless of where you live. It is taxed under the head Income from House Property. You are allowed the standard 30% deduction on net annual value for repairs and maintenance, plus a deduction for municipal taxes paid and for home-loan interest if applicable. After deductions, the balance is added to your taxable income in India and taxed at slab rates.
Crucially, you must file an Indian income-tax return if your taxable India income crosses the basic exemption limit — and you usually should file anyway to claim refunds of excess TDS (more on that below).
3. Section 195 TDS — the part most NRIs get wrong
When a tenant pays rent to a resident landlord, TDS rules are light. But when the landlord is an NRI, the tenant is legally required to deduct TDS under Section 195 before paying you, and deposit it with the government. The headline rate is 30% plus surcharge and cess (often ~31.2%), applied to the rent — not to your net taxable income.
This catches both sides off guard. Tenants of NRI landlords must obtain a TAN, deduct TDS each month, deposit it, and file Form 27Q quarterly, issuing you Form 16A. Many individual tenants simply do not know this — and if they fail to deduct, the liability and penalties can land on them.
How to avoid over-deduction: the lower-deduction certificate
Because 31.2% on gross rent is almost always far more than your actual tax liability after the 30% standard deduction and slab rates, you can apply to the Indian tax department for a lower (or nil) deduction certificate under Section 197. With it in hand, your tenant deducts a much smaller percentage, improving your monthly cash flow instead of you waiting a year for a refund.
- Tenant obtains a TAN and deducts TDS monthly
- Tenant deposits TDS and files Form 27Q each quarter
- You receive Form 16A as proof of tax paid
- You apply for a Section 197 lower-deduction certificate to reduce the rate
- You file your Indian return to reconcile and claim any refund
4. FEMA, RBI rules and the right bank account
Under FEMA, rent earned in India is treated as current-account income. You should have your rent credited to an NRO (Non-Resident Ordinary) account — this is the account designed for India-sourced income like rent, dividends and pensions. An NRE account is for foreign earnings remitted into India and is generally not the correct destination for domestic rent.
Repatriating your rent abroad
You can repatriate rental income from your NRO account, subject to limits (currently up to USD 1 million per financial year from NRO balances) and after taxes are paid. The process requires a chartered accountant to certify the remittance via Form 15CB, and you (or your representative) to file Form 15CA online. Banks will ask for these before processing the outward remittance.
5. Documentation you should keep
- Registered rent agreement (stamp duty paid)
- Tenant KYC and police verification
- Monthly TDS challans / Form 16A from the tenant
- Form 15CA/15CB for any repatriation
- Receipts for municipal tax and major repairs (for deductions)
- A Power of Attorney if someone manages the property on your behalf
6. The practical problem: who does all this from 7,000 miles away?
On paper the rules are manageable. In practice, coordinating a tenant's TDS filings, getting an agreement registered, collecting rent on time, handling repairs and keeping documentation — across a 10-hour time difference — is exactly where most NRI owners lose money or peace of mind. This is the gap a dedicated NRI property-management service fills: rent collected and transferred to your NRO account with proof, TDS coordinated with your CA, agreements drafted and registered, and a monthly report so you always know your Zirakpur property is running properly.
Want your Zirakpur property handled end-to-end — rent, TDS and compliance included?
See Rentvala NRI Property CareThis article is general information, not tax advice. Rules change and individual situations differ — always confirm with a qualified chartered accountant before acting.