Kept a rental flat abroad after moving back to India? Your Indian return taxes the rent, on India's rules.

The forgotten return is the one for the property you left behind. People who move back to India are diligent about their Indian income and their foreign bank accounts, and then overlook that the flat they kept in Dubai or London is still earning rent that India now wants to see. Once you become Resident and Ordinarily Resident, India taxes your worldwide income, and rent from an overseas property is squarely part of that.

The timing is the first thing to get right. For your first two to three financial years back you are usually Resident but Not Ordinarily Resident, and during that RNOR window your foreign rent stays outside Indian tax as long as you receive it abroad. So there is often a genuine grace period before any of this bites. But the day you become an ordinary resident, the foreign rent joins your Indian taxable income, and it is reported under India's own head for property income, Income from House Property, on India's own rules.

Those rules are the part that surprises people, because India does not simply take the number you already worked out abroad. It rebuilds the figure from scratch, with its own deductions, and then gives you credit for any tax the other country charged. Take the two pieces in turn, the Indian computation and the credit, and the return is manageable.

When India taxes your overseas rent, it uses the same house-property machinery it applies to an Indian flat, which means the deductions are Indian, not those of the country the property sits in. This is why your Indian taxable rent will not match the figure on your US or UK return.

The build is straightforward, with one trap. Start with the annual rent. Subtract the municipal or local property taxes you actually paid abroad. From what remains, take a flat 30 percent standard deduction, India's fixed allowance for repairs and maintenance, which needs no bills and is often far more than you really spend. Then subtract interest on any loan taken against the property, with a caveat: if that loan is from a lender outside India, an overseas bank on the mortgage, Section 25 can disallow the interest unless Indian tax was deducted on it, so a foreign mortgage is not always the clean deduction an Indian one would be. What is left is your income from house property, which is added to your other income and taxed at your slab rate.

That flat 30 percent is generous and mechanical, and it frequently makes the Indian taxable rent lower than you expect. But it also means the number genuinely differs from the foreign one, where the other country may have let you deduct actual expenses and depreciation instead. The mismatch is normal; the important thing is to compute the Indian figure the Indian way rather than copying across what you filed abroad.

If the country where the property sits already taxed the rent, you do not pay full Indian tax on top. You claim a foreign tax credit for the tax paid abroad, on Form 67 (renamed Form 44 from the tax year 2026-27 under the Income-tax Act 2025), under the tax treaty between India and that country, and it is set against the Indian tax on the same rental income. You claim the credit through that form; since 2022 you have until the end of the assessment year to file it, not only the return due date, but do file it, because the credit is claimed on it.

The credit is limited to the Indian tax on that rent, and because the two countries computed the income differently, the foreign tax and the Indian tax rarely line up exactly. Sometimes the credit wipes out the Indian tax entirely; sometimes a little Indian tax remains because India taxed a slightly higher figure. Either way, the same rent is not taxed twice over.

The Gulf case is the clean opposite and worth stating plainly. The UAE and most Gulf states levy no personal income tax on rent, so there is no foreign tax to credit, and once you are ROR that Dubai rent is taxed in India in full, at your slab rate, with only the 30 percent deduction and loan interest to bring it down. Many returning NRIs from the Gulf assume rent that was tax-free there stays tax-free; on the Indian side, once the RNOR window closes, it does not.

The single most useful lever here is the one you get automatically for a while: the RNOR window. For your first two to three financial years back, foreign rent received abroad is outside Indian tax, so there is room to plan, to decide whether to keep the property, and to time any sale or restructuring before the full worldwide charge begins. How long the window lasts depends on your day-count history under Section 6, so confirm your own position rather than assume the maximum.

When the window closes and you become ordinarily resident, two obligations start together. The foreign rent becomes taxable as above, and the overseas property and the foreign account the rent flows into become foreign assets you must disclose in Schedule FA of your Indian return, every year, whether or not you sell. The income tax and the asset disclosure are separate duties, and missing the Schedule FA side is what turns a manageable rent into a Black Money Act 2015 problem.

So treat the move back as the moment to map the property, not something to deal with later. Use the RNOR window while it runs, get the currency conversion and the foreign tax credit right from the first ordinarily-resident return, and put the property on Schedule FA from the year it is due. Done in that order, a flat kept abroad is a manageable line on your Indian return rather than a notice waiting to happen.