How US rental income is taxed in India

Should a resident Indian receiving rental income from the US take advantage of depreciation and other tax reliefs allowed in the US, and then report the house property income on a net basis for tax purposes in India?

- Ajay R. Vaswani

-Name withheld on request

No, a resident Indian earning rental income from a property located in the US cannot directly claim depreciation and other deductions allowed under US tax laws to compute the net rental income when offering it for tax in India.

While income should be reported in India, the taxation of such income falls under the head "income from house property", and specific provisions under the Indian Income Tax Act, 1961, must be adhered to. Indian tax authorities do not allow direct deductions for United States (US)-specific tax reliefs, such as depreciation, when calculating the taxable income in India.