• NRI: Income from house rent

Hello,

I won a property in Bangalore and I have home loan for i which will be over by November 2019. I have been away since May 2016 and I have been receiving rent from this property. The next income (rent, loan etc) for each of the year from 2016 has been less than Rs. 2,50,000. 
Unfortunately I have been filing ITR1. 

1. Am I supposed to file ITR2? What are the implications as I have files ITR1? Do I need to correct this considering my income in India has been less than 2,50,000?

2. My tenant also has not deducted TDS all this while nor has submitted Form 15CA. Does she need to submit form 15CA for previous years now? Does she have to do it on monthly basis? What is the detailed process for tenant here?

Please let me know.
Asked 1 month ago in Income Tax from Bangalore, Karnataka

Where were you filing ITR 1 for all this year's if you were an NRI.

Now for current year file your return as ITR 2 and mention yourself as NRI and you can't do anything for previous year's return for now so just wait.

If your tenant is making a foreign payment then she needs to file form 15CA otherwise not. If she has been making payment to your indian bank account i.e. NRO account she is not required to file 15CA.

Also technically she needs to deduct TDS u/s 195.

This situation has a lot of if and but so it would be better if you can hire a CA in India.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
1981 Answers
17 Consultations

5.0 on 5.0

- As you were away since May 16 i.e. F.Y.2016-17 and 17-18 (A.Y. 2017-18 and A.Y. 2018-19), means you were outside India for more than 182 days and residential status for the A.Y. 2017-18 and 18-19 is NRI. Only for two years, ITR was filed in wrong form. It can not be rectified now and you need not worry as the total income was below the threshold limit.

 

- In respect to A.Y. 2019-20, file the ITR in correct form.

 

- Yes tenant needs to deduct TDS@31.2% on the gross rent paid u/s 195 and needs to file the TDS return. To avoid it, she needs to get the NIL deduction certificate u/s 195(2) and no need to deduct TDS.

 

- Yes, she needs to upload Form 15CA at the time of each payment irrespective of the nature of the account. 

Vivek Kumar Arora
CA, Delhi
2942 Answers
144 Consultations

5.0 on 5.0

In India, residential status is dependent on the number of days you spent in India.  If you have spent less than 60 days in FY 2016-17, 2017-18 and 2018-19, you are non-resident.  In such a case, only your Indian sourced income is taxable in India.

As your income is below the taxable limit you were not required to file tax return in India. Being a non-resident, ideally ITR 1 was not applicable to you.  Now, you have missed the due date for filing the revised return. Since your taxable income is below the limit, I don’t foresee any notice been issued to you.  IN case, any such notice is issued, you write a letter and file a revised return in correct form.

However, you have time to revise your return filed for March 2019 and you can file the same in ITR 2.

TDS on rent is deductible is rent paid per month is 50,000 or more. IN case,this rent is paid in your Indian account, the payer need not issued form 15CA.

Jasmina Jain Shah
CA, Greater Mumbai
361 Answers
4 Consultations

5.0 on 5.0

Hello,

 

1. Yes, ITR-1 was not applicable to you being an NRI. For past years, you cannot file revise return now. Since your total income was below basic exemption limit, no issue would be there. From F.Y. 2018-19 A.Y. 2019-20, file correct ITR. If you have already filed ITR-1 for A.Y. 2019-20 also, you can revise the same.

2. TDS is to be deducted by the tenant at 31.2% of the rent, unless the NRI landlord furnishes a certificate stating that his total income in India is estimated to fall below the tax exemption limit. It is mandatory for the tenant to fill in Form 15CA online on the income tax portal while paying rent each time.

I hope this answer satisfies your requirement.

 

Regards,

CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Neemuch
794 Answers
1 Consultation

5.0 on 5.0

If you are an NRI now then ask your tenant to fill Form 15CA to be on a safe side.

Naman Maloo
CA, Jaipur
1981 Answers
17 Consultations

5.0 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

1. Yes, you need to file ITR 2. 

ITR-1 is not applicable for the RNORs and the non-residents, they have to necessarily go with ITR-2 for filing their return of income.

 

2.In your case, 15CA is not applicable as the rent is received in your Indian account.

 

 

Payal Chhajed
CA, Mumbai
2853 Answers
39 Consultations

5.0 on 5.0

Dear Sir,

 

It is not needed if it's below 50K and remitted in Indian account.

 

We have handled such cases before. We may help you with return filing.

Payal Chhajed
CA, Mumbai
2853 Answers
39 Consultations

5.0 on 5.0

There are various things which are jumbled up here - 

firstly - Tds, in case of a payment to non- resident, the payer is required to deduct tax on any amounts of rent paid.  However, since your taxable income is below 250,000 you can submit a declaration and claim non deduction of taxes. You need to make an application before the tax authorities and can claim lower deduction certificate. However, practically, this certificate is time consuming. The easy option would be Camlin refund by filing tax return if the payer had deducted tax.  The limit of 50000 is applicable when the rent is paid to a resident. 

 

Now, 15CA-  this is only applicable when the payments are remitted abroad. If the payment is done in your Indian bank account, this form need not be submitted. When the payments fe made abroad, the bank will not allows any fund to go abroad before you submit form 15CA and 15CB.

 When your total income exceed 2,50000, but less than 5 lac- you should file your return though tax liability may be Nil. 

Jasmina Jain Shah
CA, Greater Mumbai
361 Answers
4 Consultations

5.0 on 5.0

Form 15CA is not required if the payment is below Rs. 50,000 and is in an Indian bank account. Otherwise, Form 15CA is required to be filed. 

Hunny Badlani
CA, Neemuch
794 Answers
1 Consultation

5.0 on 5.0

Dear Sir,

 

Form 15CA and 15CB will be NOT be required to be furnished by an individual for remittance, which does not require RBI approval

List of payments of specified nature mentioned in Rule 37BB, which do not require submission of Forms 15CA and 15CB, has been expanded from 28 to 33 including payments for imports.

Form No. 15CB will only be required for payments made to non-residents, which are taxable and if the payment exceeds Rs. 5 lakhs.

Payal Chhajed
CA, Mumbai
2853 Answers
39 Consultations

5.0 on 5.0

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