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Kuwait NRIs · Rental Income Tax

Rental income tax for NRIs in Kuwait

Renting out Indian property from Kuwait means your tenant must deduct tax on the gross rent. Set it up right and reclaim the heavy over-deduction.

When you rent out Indian property while living in Kuwait, the rent is taxed in India. Under the India-Kuwait treaty, income from immovable property is taxable where the property sits, so the rate doesn't drop for living abroad. Because you're a non-resident landlord, your tenant is legally required to deduct tax at source on the rent under Section 393(2) (Section 195 until 31 March 2026), at the 31.2% non-resident rate on the gross rent, not under the lighter resident-landlord rule. That deduction is heavier than your actual tax, because you get a 30% standard deduction when you file, so most of the gap comes back as a refund.
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India-Kuwait key facts: rental income tax

Default non-resident TDS rate31.2%
What the treaty changes hereIt sets no lower rate on this income. What a treaty decides here is which country gets to tax it.
Treaty article / basisSource country
Your TRC issuing authoritythe Ministry of Finance, Department of Income Tax

Rates reflect India's domestic withholding under Section 393(2) (Section 195 until 31 March 2026) and the India-Kuwait treaty. Surcharge applies on top; the 4% cess is already included in this figure.

How it works on the India side

A tenant paying rent to an NRI landlord must deduct TDS under Section 393(2) (Section 195 until 31 March 2026), the provision for any payment to a non-resident, which means the tenant has to take a TAN, deduct each month on the gross rent, deposit it, file a quarterly Form 144 (the old Form 27Q) against your PAN, and issue you a TDS certificate. The common, costly mistake is the tenant using Section 194-IB, the 2% resident-landlord rule, which doesn't apply to a non-resident landlord and leaves both sides exposed.

The deduction on gross rent is more than you actually owe, because your taxable rental income is much smaller: a flat 30% standard deduction comes off under Section 24(a), and home-loan interest comes off too. When you file your return, the TDS the tenant deposited is set against your real liability and the excess is refunded, but only if the tenant's quarterly statement correctly reports it against your PAN, which is why setting the tenant up right from the start matters. If you'd rather not wait a year for that refund, a lower-deduction certificate on Form 128 under Section 395 (the old Form 13 under Section 197) can cut the monthly deduction at source instead.

What changes because you live in Kuwait

Kuwait charges individuals no personal income tax, so there's no second layer on this Indian income and no foreign tax credit to chase. The catch sits on your side of the border anyway. This treaty's residence test is unusually narrow: Article 4(1)(b) counts you as a Kuwait resident only if you're an Indian or Kuwaiti national who was physically present in Kuwait for at least 183 days in the fiscal year, and Article 3 defines that year as the one beginning 1 April, so the count runs April to March, not over the calendar year. If you've swapped your Indian passport for another one and now hold OCI, you're neither an Indian nor a Kuwaiti national, so this treaty gives you nothing, which is why a bank's Kuwait DTAA declaration makes you confirm Indian nationality and quote your Indian passport number.

Frequently asked questions

Common questions from Kuwait NRIs

Under Section 393(2), the successor to Section 195, because you're a non-resident landlord. The tenant has to take a TAN, deduct on the gross rent at the 31.2% non-resident rate, deposit it, file a quarterly Form 144 (the old Form 27Q) against your PAN and give you the TDS certificate. Section 194-IB, the 2% rule most tenants know (it was 5% until 1 October 2024), applies only to resident landlords and is the wrong provision for a non-resident.

Yes. The deduction is on the gross rent, but your taxable rental income is much smaller, because you get a flat 30% standard deduction under Section 24(a) plus any home-loan interest before tax is computed. The over-deducted amount comes back as a refund when you file your Indian return, provided the tenant's quarterly statement correctly reports the TDS against your PAN. Kuwait NRIs who don't want to wait for that refund apply for a Form 128 certificate instead.

No. Income from immovable property is taxable where the property sits, so Indian rent stays taxable in India regardless of where you live. The rent normally isn't charged in Kuwait, so India's tax is all you pay on it. The note below carries any exception. The treaty stops double taxation. The saving comes from the 30% standard deduction and reclaiming the over-deducted TDS, not from a lower treaty rate.

Go further

Read the full guide, or see your country's complete picture

NRI landlord: setting your tenant up for Section 195 TDSKuwait NRI tax guide: every income type and the rates that apply

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