I am a non-resident Indian (NRI) and own a couple of properties in Dubai. Do I have to declare them in India? Is the rental income from these properties in Dubai taxable in India?

—Asghar Khan

Taxability in India depends on the following factors:

(a) Source of income

(b) Residential status

Typically, source of income lies where the services are performed, or where the income-generating asset is located. Residential status in India is determined by physical presence in India in the current financial year (FY) (1 April to 31 March) and preceding 10 FYs.

An individual qualifying as a non-resident is taxable only on India-sourced income and is not required to report assets held outside India in the India income-tax return.

You qualify as a non-resident in India if either of these two conditions are satisfied:

(a) You are physically present in India for less than 60 days in the current FY; or

(b) You are physically present in India for more than 60 but less than 182 days in the current FY and were present in India for less than 365 days in the preceding 4 FYs.

As a non-resident (as per the Indian tax laws), rental income earned and received in Dubai is not taxable in India and you don’t have to report it in the India income-tax return.

I am a Singapore citizen, living in Singapore. I have a flat in India that I have rented out. Do I need to pay tax on it? How do I account this for tax?

—R.V. Lingam

Taxability in India depends on source of income and residential status. Typically, source of income lies where the services are performed, or where the asset, from which the income arises, is located.

Rental income from property in India is considered income accrued in India and taxable in India irrespective of residential status. The taxable value of rental income is calculated after deductions such as:

—Municipal taxes;

—Standard deduction at 30% of the taxable value;

—Interest paid on a loan for construction, acquisition, or renewal of the property;

—Pre-construction period interest deduction.

Also, any repayment of principal amount against housing loan for such property is also eligible for deduction under Section 80C of the Income-tax Act, 1961 (up to Rs1.5lakh). But if your total taxable income in India (including rental income and/or any other income) does not exceed Rs2.5 lakh, you are not required to file income-tax return in India. Depending on your residential status in Singapore, rental income in India may also be taxable in Singapore. Also, depending on your residential status in Singapore, the rental income in India may also be taxable in Singapore.

Sonu Iyer is tax partner and people advisory services leader, EY India.