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Mauritius NRIs · Rental Income Tax

Rental income tax for NRIs in Mauritius

Renting out Indian property from Mauritius 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 Mauritius, the rent is taxed in India. Under the India-Mauritius treaty, income from immovable property is taxable where the property sits (Article 6), 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-Mauritius 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 / basisArticle 6
Your TRC issuing authoritythe Mauritius Revenue Authority (MRA)

Rates reflect India's domestic withholding under Section 393(2) (Section 195 until 31 March 2026) and the India-Mauritius 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 Mauritius

On foreign income Mauritius only taxes what actually reaches Mauritius. Indian rent, interest and dividends land on your MRA return in the income year the money is received in Mauritius or is dealt with here in your interest (section 5(3), Income Tax Act 1995), and because Mauritius has no capital gains tax, a share or property sale is not taxed again on this side at all. The trap is in the credit. Under the Income Tax (Foreign Tax Credit) Regulations 1996 the MRA allows the least of the Indian tax you can prove, the amount the treaty lets India charge, and the Mauritius tax on that income, and if you remit only part of the income the credit shrinks to that part. So anything India withheld above the treaty cap is dead in Mauritius, only your Indian return gets it back, and the MRA wants written evidence of the tax India actually deducted, not your own workings.

Frequently asked questions

Common questions from Mauritius 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. Mauritius 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 (Article 6), so Indian rent stays taxable in India regardless of where you live. Mauritius may tax the same rent, with a credit for the Indian tax paid, though whether it does turns on remittance and residence-year rules the note below sets out. 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 TDSMauritius NRI tax guide: every income type and the rates that apply

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