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Microlesson · 5-min read

Taxability of house property situated outside India (residential status linkage)

## House Property Situated Outside India

Taxability of foreign house property income turns entirely on the residential status of the assessee.

Residential statusTaxability of foreign house property income
Resident & Ordinarily Resident (individual/HUF)Taxable whether or not the income is brought into India
Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR)Taxable only if received in India

Key point: Even for foreign property, municipal taxes paid abroad are deductible while computing NAV, provided the property's income is chargeable under Section 23.

Worked example

### Example 1

ROR vs RNOR: Mr. X owns a flat in London earning rent equivalent to ₹6,00,000, which he retains in his UK bank account. If X is ROR, the ₹6,00,000 is taxable in India (receipt in India is irrelevant). If X is RNOR or NR, it is NOT taxable in India because it was neither received nor brought into India.

⚠️ Common exam mistakes

  • Taxing foreign house property income of an RNOR/NR even though it was never received in India — for them it is taxable only on receipt in India.
  • Requiring an ROR to remit the foreign income into India before taxing it — for an ROR global income is taxable on accrual basis, regardless of remittance.
Reference: Section 22; Section 23 — Income-tax Act, 1961
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