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Vietnam NRIs · Rental Income Tax

Rental income tax for NRIs in Vietnam

Renting out Indian property from Vietnam 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 Vietnam, the rent is taxed in India. Under the India-Vietnam 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-Vietnam 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, source-country taxation
Your TRC issuing authoritythe General Department of Taxation (provincial Department of Taxation)

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

In Vietnam a rental contract can make you a tax resident, whatever your day count says. Article 2 of the new PIT Law (109/2025/QH15, in force 1 July 2026) counts a rented home on a fixed-term lease as habitual residence, and the guiding rules add up separate contracts in separate cities to reach 183 days in the tax year. Once that bites you're taxed on income arising outside Vietnam as well, and the only way out is another country's certificate of residence. India won't issue you one, since an Indian TRC goes to residents of India. The relief then disappoints. Vietnam credits your Indian tax only up to the Vietnamese tax on the same income, and that figure is a flat cut of the gross: 5% on dividends and interest under Article 12, 0.1% of the sale price on shares, 2% of the price on property under Article 14, charged even on a sale that lost money.

Frequently asked questions

Common questions from Vietnam 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. Vietnam 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. Vietnam 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 TDSVietnam NRI tax guide: every income type and the rates that apply

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