US-Based NRI: Lower TDS on India Rental Income
Situation
An NRI based in the US owned a rented residential property in India generating about ₹1.2 lakh a month. The tenant, out of caution, was deducting TDS at close to the maximum rate of ~31%, well above what applied once the client's actual liability and treaty position were properly established.
Approach
We confirmed the client's US tax residency, obtained the Tax Residency Certificate from US authorities, and filed Form 41 (formerly Form 10F) to formally support the treaty position, then provided the tenant a computation supporting a correct, lower TDS rate of around 15%.
Outcome
TDS on the rental income came down from ~31% to ~15%, taking the tenant's monthly deduction from about ₹37,200 to ₹18,000, roughly ₹2.3 lakh more reaching the client's account each year, with no more repeated refund claims. TRC and Form 41 are now renewed annually as a routine process.
Identities are anonymized to protect client confidentiality. The situation, approach, and figures reflect an actual engagement.
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