When a tenant in India rents from a resident landlord, TDS on rent only kicks in above a specified threshold, and the rate is relatively modest. When the landlord is an NRI, Section 393(2) applies instead, and the obligation looks very different: the tenant must deduct TDS on the rent from the first rupee paid, with no minimum exemption amount, at a materially higher rate.
The rate and the mechanics
The default TDS rate on rent paid to an NRI landlord runs to roughly 30% of the rent plus applicable cess (commonly cited around 31.2% all-in), deducted at whichever comes first — when the rent is credited to the landlord or when it's actually paid. That deducted amount has to be deposited with the government by the 7th of the following month, using the standard TDS challan, and the tenant generally needs to obtain a TAN (Tax Deduction Account Number) to do this correctly — an extra registration step most individual tenants have never dealt with before.
Ways the rate can come down
The applicable rate can be reduced if the NRI landlord qualifies for a lower rate under the DTAA, or has obtained a lower/nil deduction certificate in advance — the same Section 197 mechanism (recently renumbered to Section 395 under the Income-tax Act, 2025, per this site's Form 13 explainer) used for NRI property-sale TDS. Without that certificate in hand, tenants generally default to withholding at the full statutory rate, since they have no independent way to verify a lower rate applies.
This obligation sits on the tenant, not the landlord — which is exactly why it surprises people who've only ever rented from resident landlords before. If you're the tenant, this is worth raising with the landlord (or a CA) before the first rent payment, not after.