Your Paris apartment earns €18,000 in rent. France taxes it. India can also tax it. Here's how the treaty splits the bill.

France gives rental landlords a choice between two tax regimes for unfurnished rental property. Which one applies depends on your gross annual rental income and (in some cases) which one you elect.

Micro-foncier is the default for landlords whose gross annual rental income from all French unfurnished properties is €15,000 or less. The mechanism is simple: France gives you a flat 30% deduction for assumed expenses, and the remaining 70% of gross rent is taxed at your French marginal income tax rate. No itemised expense tracking, no depreciation, no carryforward losses.

Régime réel is mandatory above the €15,000 threshold and elective below it. You deduct actual expenses — mortgage interest, property tax, condominium fees, repairs and maintenance, insurance, agent fees, accountant fees. If actual expenses exceed gross rent, you can carry forward the deficit (deficit foncier) to offset future rental income and, within limits, your other income. For Paris property with mortgage interest, régime réel almost always wins above the threshold.

For a typical Indian-French NRI with one Paris 1-bedroom rented out at €1,500/month (€18,000/year), régime réel is mandatory because you're over the €15k threshold. Itemise your costs: mortgage interest (often €5-9k/year on a Paris flat), copropriété charges (€2-3k), property tax (€1-2k), insurance (€300-500), agent fees if used (€1-2k). The total deductible expenses on a typical Paris flat are often €10-15k, leaving net rental income of €3-8k for the French tax base.

On top of French income tax, French rental income attracts social charges of 17.2% (CSG 9.2% + CRDS 0.5% + prélèvement de solidarité 7.5%). For French residents, this is a flat add-on to the tax bill.

For non-residents of France, the rate depends on social security affiliation. The Ruyter case law (CJEU 2015) and subsequent French legislation established that individuals affiliated with another EU/EEA/Swiss social security scheme pay only the 7.5% prélèvement de solidarité, not the full 17.2%.

India is not in the EU/EEA, and India does not have a totalisation agreement on social security with France that would qualify Indian-affiliated individuals for the reduced rate. The default position for an Indian-French NRI who's moved their tax residence to India is the full 17.2% on French rental income. A handful of Paris CAs argue for the 7.5% rate on broader 'non-affiliated to French social security' grounds, but this position has been losing in recent Conseil d'État rulings and most reliable tax practice now applies the full 17.2% to non-EU NRIs.

Plan around the full 17.2% as your baseline. If your CA is taking a 7.5% position, get the legal basis in writing and budget for the potential reassessment — the difference is ~10 percentage points of effective tax on French rental income, material on a €15-18k net rental flow.

The India-France DTAA's Article 6 governs income from immovable property. The principle: income from immovable property is taxable in the contracting state where the property is situated. France has the primary right to tax rental income from French real estate.

France taxes it. Then the Indian-side comes into play through Article 24 (relief from double taxation): India, as the residence country of an Indian-French NRI who's now Indian-resident, includes the French rental income in the worldwide income computation and gives credit for the French tax paid.

The Indian computation: gross French rental converted to INR at the closing rate, included in Indian ITR-2 under Schedule FSI (Foreign Source Income). The deductions allowed under Indian law (Section 24(a) standard 30% deduction for repairs, Section 24 mortgage interest if any) may differ from what France allowed. The Indian tax base on the same property's rental may be different from the French tax base.

Form 67 is filed for the French tax paid (income tax + social charges, depending on your position). The FTC is capped at the Indian tax on the same income slice. Where Indian tax is lower than French tax, the excess French tax is a sunk cost — not refunded by India, not creditable elsewhere.

France's régime réel allows extensive depreciation on the building structure (not the land) for furnished rentals under the LMNP (Loueur Meublé Non Professionnel) status. This is a major shelter for furnished short-term lets, including many Paris Airbnb-style operations. Depreciation can wipe out taxable rental income for years.

India does not recognise foreign-side depreciation. The Indian tax base on the same French property is the gross rent minus the Section 24(a) standard 30% deduction and any actually-incurred mortgage interest under Section 24. The Indian base will frequently be higher than the French base, especially for LMNP-furnished setups.

The mismatch creates a counter-intuitive outcome: France may show zero or negative taxable income on the rental, but India shows ₹5-10 lakh of taxable rental income. Form 67 FTC has nothing to credit (France paid no tax), so the full Indian tax applies. The LMNP depreciation shelter that's so valuable for French residents is essentially a one-side shelter for Indian-French NRIs.

For unfurnished rentals under régime réel without LMNP status, the divergence is smaller. Mortgage interest is deductible in both countries; actual repairs are deductible in France but not separately deductible in India (rolled into the Section 24(a) 30% standard). The mismatch is manageable.

The cleanest tax setup for Indian-French NRIs who buy Paris property for rental: unfurnished long-term lease, régime réel for the French side, deduct mortgage interest aggressively, accept the modest residual French tax, and align the Indian-side ITR-2 reporting so the FTC actually flows.

Indian-French NRI owns a 50 m² flat in the 11th arrondissement. Rents it unfurnished at €1,500/month = €18,000 gross annual rent.

French side (régime réel mandatory, over €15k threshold):

- Mortgage interest: €7,200

- Copropriété charges (non-recoverable portion): €2,400

- Taxe foncière (property tax): €1,500

- Insurance: €350

- Agent management fee (8% of rent): €1,440

- Total deductible expenses: €12,890

- Net rental income (French base): €5,110

- French income tax at the 20% non-resident minimum rate: €1,022

- Social charges at the full non-EU 17.2%: €879

- Total French tax: €1,901

Indian side (NRI is now Indian resident, beyond RNOR window):

- Gross rental in INR (assume €1 = ₹95): ₹17,10,000

- Section 24(a) standard 30% deduction: ₹5,13,000

- Section 24 mortgage interest (in INR): ₹6,84,000

- Net rental income (Indian base): ₹5,13,000

- Indian tax at 30% slab (Indian-French NRI is typically in top bracket given other Indian income): ₹1,53,900

- French tax paid in INR (€1,901 × 95): ₹1,80,595

- Form 67 FTC capped at Indian tax on this slice: ₹1,53,900

- Net Indian tax after FTC: ₹0

- Excess French tax beyond Indian tax (sunk cost): ₹26,695

Total global tax: ₹1,80,595 (all French) on €18,000 gross rent (~10.6% effective). Compares well against a Paris-resident landlord on the same property, who would pay roughly 30-35% effective through French income tax + full 17.2% social charges + their personal marginal bracket layered on top.

January-April: Gather rental income statements, mortgage interest certificates, copropriété accounts, taxe foncière notices for the prior calendar year. The French déclaration 2042 (general income tax form) plus 2044 (foncier annexe) cover the rental income.

May-June: File the French déclaration 2042 + 2044. Non-residents file at the Service des Impôts des Particuliers Non-Résidents (SIPNR) in Noisy-le-Grand. Online filing is preferred and available with a numéro fiscal (French tax number).

July-September: France issues the avis d'imposition (tax notice). Pay the assessed tax via prélèvement à la source or direct payment.

April-July (Indian FY): File Indian ITR-2 covering the prior Indian FY. The Indian FY may include parts of two French calendar years (e.g., Indian FY 2025-26 covers April 2025 to March 2026, which overlaps French calendar years 2025 and 2026). Pro-rate the French rental income to the relevant Indian FY months.

File Form 67 before/with the ITR-2 reporting French tax paid in the relevant period. Maintain documentation: French avis d'imposition, rental income statements, mortgage interest certificates.

The calendar-year vs Indian-FY mismatch is a recurring administrative headache for Indian-French NRIs with French rental income. Set up a shared spreadsheet between your French CA and Indian CA tracking the same rental flow from two angles. The duplication is annoying but necessary for clean FTC accounting.