NRIs earning rental income from Indian property can claim a 30% standard deduction on that income, plus a deduction for home loan interest under Section 24(b) (up to ₹2 lakh/year for a self-occupied property), before tax is calculated. Rental income is credited to an NRO account and, after applicable tax, can be repatriated abroad freely — up to an aggregate USD 1 million per financial year. NRE and FCNR account balances (not rental income specifically) are freely repatriable without this ceiling.
NRIs can claim a 30% standard deduction on rental income from Indian property before tax.
Home loan interest is deductible under Section 24(b), up to ₹2 lakh/year for a self-occupied property.
Rental income (received via NRO account) can be repatriated abroad after tax, up to USD 1 million aggregate per financial year.
This USD 1 million cap applies specifically to NRO-sourced repatriation; NRE/FCNR account balances are freely repatriable without this ceiling.
Required Documents
NRO bank account for rental income
PAN card
Rental agreement
Tax payment/withholding certificates for repatriation
Common Mistakes
Assuming rental income can be repatriated without limit like NRE/FCNR balances — the USD 1 million/year aggregate cap applies specifically to NRO-sourced funds.
Forgetting to claim the 30% standard deduction and Section 24(b) home loan interest deduction, resulting in overpaying tax on rental income.