You can rent out a property in India while living abroad, and many NRIs in Coimbatore do. To do it well you need a written tenancy agreement registered with the Rent Authority under Tamil Nadu’s 2017 tenancy law, rent paid into your NRO account, tax deducted by the tenant where the law requires it, and a trustworthy person or company on the ground to handle tenants and repairs.
Key takeaways
- Tamil Nadu’s 2017 tenancy Act requires a written agreement registered with the Rent Authority; the online portal is tenancy.tn.gov.in.
- The Act caps the security deposit at three months’ rent.
- Rent paid to a non-resident is subject to TDS by the tenant; rent should be credited to your NRO account.
- Current income such as rent can be remitted abroad after tax, with Forms 145 and 146 where applicable.
- Appoint a property manager formally and tell the tenant who they are, as the Act requires.
Tamil Nadu’s tenancy law in brief
The Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 governs most residential and commercial tenancies in the state. The points that matter most for an NRI landlord are:
- Written agreement: no tenancy should be created except by a written agreement.
- Registration with the Rent Authority: the landlord or tenant must register the agreement with the Rent Authority, which issues a registration number. This is done online through the state’s tenancy portal for a small fee, and it is separate from registration under the Registration Act.
- Security deposit: it is unlawful to charge more than three months’ rent as a deposit.
- Property manager: if you appoint one, you must give the tenant the manager’s name, proof of authority and contact details.
- Disputes: the Act sets up Rent Authorities and Rent Courts for faster resolution, but unregistered agreements weaken your position.
We explain the agreement itself in our guide to rental agreements under the Tamil Nadu Tenancy Act.
Tax on rent when you are an NRI
| Item | How it works |
|---|---|
| Taxability | Rent from property in India is taxable in India, whatever your residence. |
| TDS by tenant | A tenant paying rent to a non-resident must deduct TDS under the non-resident provision (old section 195, now section 393(2) of the 2025 Act), usually at 30% plus surcharge and cess, with no threshold. |
| Deductions | Municipal property tax paid and a standard deduction of 30% of the annual value; interest on a loan for the property, subject to limits. |
| Lower TDS | If your actual tax is lower, apply for a lower deduction certificate on Form 128. |
| Return | File an Indian return to claim TDS credit and any refund. |
In practice, TDS on rent is easy for corporate tenants who already have a TAN, but individual tenants often do not know about it. Explain it before signing and write it into the agreement. If the tenant fails to deduct, the tax department can pursue the tenant, which sours the relationship. See how rental income is taxed for the general rules.
Where the rent should go
Rent is income earned in India, so it should be credited to your NRO account, not your NRE account. Current income such as rent can be remitted abroad after tax. Your bank will ask for Form 145 (earlier 15CA) and, above the threshold, a chartered accountant’s certificate on Form 146 (earlier 15CB). Rent can also be used to pay the EMIs on a home loan for the same property.
Choosing who manages the property
| Option | Suits | Watch out for |
|---|---|---|
| Family member | One flat close to relatives | Relationships get strained over repairs and vacancies |
| Professional property manager | Owners wanting tenant search, rent collection and inspections handled | Check contract terms, fee structure and how they hold deposits |
| Builder or association-run management | Apartments in large gated communities | Services may be limited to maintenance |
Whoever you choose, give them written authority. For registration, bank or court work, a specific power of attorney executed from abroad may be needed. Keep powers narrow.
A practical checklist for NRI landlords
- Prepare the home: fix plumbing, electrical and waterproofing issues before letting; in Coimbatore, check the water supply arrangements and borewell or storage capacity.
- Screen tenants: check identity, employment and references. Tenant verification with the local police is a common and sensible step in Tamil Nadu.
- Sign a clear agreement: rent, deposit (not more than three months’ rent), escalation, maintenance split, notice period, lock-in, TDS and rent account details.
- Register the tenancy: with the Rent Authority online, and under the Registration Act where the term requires it.
- Record the handover: dated photos and an inventory of fittings.
- Keep paying the bills that are yours: Coimbatore Corporation property tax and association dues, unless the agreement says otherwise.
- Inspect periodically: through your manager, with photos.
Where rental demand comes from in Coimbatore
Demand around the city comes from IT and ITES staff, students and faculty at the many colleges, healthcare workers and families relocating for business. Areas along the IT corridor such as Saravanampatti, and established neighbourhoods like Peelamedu and Saibaba Colony, see steady interest. Well-maintained, furnished or semi-furnished homes near workplaces usually let faster.
Frequently asked questions
Does my tenant have to deduct TDS if I am an NRI?
Yes. Rent paid to a non-resident is subject to TDS under the non-resident provision, now section 393(2) of the Income-tax Act, 2025, with no minimum threshold. You can apply for a lower deduction certificate if your actual tax is lower.
Can rent be credited to my NRE account?
No. Rent is income earned in India and should be credited to your NRO account. It can be remitted abroad after tax with the required forms.
What is the maximum security deposit in Tamil Nadu?
Under the 2017 Act, it is unlawful to charge a security deposit of more than three months’ rent.
Is registering the rental agreement compulsory in Tamil Nadu?
The 2017 Act requires tenancy agreements to be registered with the Rent Authority. This is done online and is separate from registration at the sub-registrar office.
This article is general information as of September 2026, not legal, tax or financial advice. Rules and rates change; confirm with a qualified advocate, chartered accountant or the relevant department before you act.
References
- Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 (text)
- Tamil Nadu tenancy registration portal
- TDSMAN: TDS on payments to non-residents, section 393(2) (old section 195)
- Income Tax Department: Form 145 (earlier Form 15CA) FAQs
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