Updated 21 October 2026. We read the Income Tax Department's rate table, the RBI's deposit and loan directions, Tamil Nadu's tenancy portal and ANAROCK's latest yield data. This guide goes further than the pages that rank today: it uses the 2025 Act's section numbers, settles the NRE-or-NRO question with the RBI's own rule, and adds city yields and a net-yield sum.

How much TDS does a tenant deduct when the landlord is an NRI?

30% of the rent, increased by surcharge and Health and Education cess (Income Tax Department, tax year 2026-27). ClearTax puts the effective rate, including surcharge and cess, at 31.2%. Resident landlords are treated differently: section 393(1) [Table S. No. 2(i)] sets 2% for rent paid by an individual or HUF not liable to audit, and S. No. 2(ii) sets 10% on land or building (same page). Those resident rates do not apply to you.

An example, using the 31.2% reported effective rate (our calculation): on rent of ₹40,000 a month, about AED 1,547, the tenant deducts ₹12,480 and pays you ₹27,520.

Does my tenant need a TAN to pay rent to me in Dubai?

Reportedly yes. ClearTax says a tenant paying rent to an NRI must get a TAN before deducting TDS. The PAN-based route that started on 1 October 2026 was reported for buyers of property from an NRI (Taxscan, 1 October 2026); it does not mention rent. Tenants should confirm with a chartered accountant.

  • What to send your tenant: your PAN, your NRO or NRE account details, and a note that TDS applies at the non-resident rate.
  • Ask for the TDS certificate each quarter, and check the credit in your Form 26AS or annual statement on the e-filing portal.
  • If a remittance abroad is involved, Form 145 replaces 15CA and Form 146 replaces 15CB from 1 April 2026 (BDO India).

Can I get TDS on rent reduced if my Indian income is low?

Yes, you can apply for a lower or nil deduction certificate in Form 128 on TRACES under section 395 of the 2025 Act; it replaced Form 13 (ClearTax, read 21 October 2026). Or let the tenant deduct the full rate and claim the excess back by filing your Indian return, where deductions such as municipal taxes paid and the standard deduction reduce taxable rent.

Can rent go into my NRE account?

Yes. The RBI says current income like rent, dividend, pension and interest is a permissible credit to an NRE account, provided the bank is satisfied it is current income and tax has been deducted, paid or provided for (Deposits and Accounts direction, para 4.7). Rent from the flat itself can also pay its home-loan EMIs (RBI Borrowing and Lending direction, updated 8 September 2026). The UAE does not tax individuals' income, so for UAE residents Indian tax is the final tax on this rent (u.ae, the UAE government portal).

What rental yield can I expect in Bengaluru, Chennai or Gurugram?

ANAROCK's figures for Q2 2026, against 2019 (gross yields; prices per sq ft):

  • Bengaluru · gross yield 3.6% → 4.6% · average price ₹4,975 → ₹9,450 per sq ft (Business Today, 4 August 2026).
  • Gurugram · 3.5% → 4.3% · ₹6,150 → ₹13,350 per sq ft (Business Today).
  • Chennai · 2.7% → 3.25% · ₹4,935 → ₹7,250 per sq ft (Upstox, 7 August 2026).
  • ANAROCK's Anuj Puri noted that rising property prices are generally inversely proportional to rental yields (Business Today).

From gross to net: a worked sum

Gross yield is rent divided by price. What reaches you is lower. An illustration on a ₹1 crore flat at Bengaluru's 4.6% gross (all costs below are our assumptions, not market data):

Managing a tenant from the UAE: a checklist

  • Registered agreement: in Tamil Nadu, all tenancy agreements must be in writing and registered with the Rent Authority under the 2017 landlords and tenants Act (tenancy.tn.gov.in). In Karnataka and Haryana, ask your lawyer whether your lease term needs registration.
  • Police verification of the tenant through the local police's online service.
  • Society dues and property tax paid online from your NRO or NRE account.
  • Security deposit received into your Indian account, with a receipt.
  • A POA holder or property manager for inspections, repairs and handover; a specific POA signed at an Al Hind centre is enough for most of this.
  • Photos and an inventory at move-in and move-out.

Ready homes that can earn rent from day one