The Non-Resident Indian can make investment in a residential property or in a commercial property with the objective of receiving a regular flow of rental income. The provisions of taxing rental income are simple, easy and investor friendly. In general terms, from the rental income derived by a Non-Resident Indian deduction is available in respect of actual payment of house tax as also a special 30 per cent deduction is available towards repairs, maintenance and collection charges of the property.
Interestingly, this special deduction is permissible irrespective of the fact whether you spend or you do not spend on repairs. This is a big deduction available from rental income which is instrumental in cutting down the tax payment by a Non-Resident Indian on rental income.
Another important feature of taxation relates to complete deduction without any upper limit of the interest paid by the Non-Resident Indian for purchase of property which is given on rent. That means, the entire interest payment for purchase of property which is given on rent is allowed as a deduction from the rental income.
NRI Abode believes, it is worthwhile for the Non-Resident Indian to make investment in real estate specially the real estate acquired for receiving a fixed flow of rental income by taking a loan for such purchase.