# DTAA Between India and UK: What It Means for Property Owners

The India-UK Double Taxation Avoidance Agreement does not stop India from taxing your Indian property. Article 6 gives India the first right to tax rental income from Indian real estate, and Article 14 lets India tax capital gains under its own domestic law. What the treaty does is stop the same income from being taxed twice: as a UK resident you report the income again in the UK and claim Foreign Tax Credit Relief for the Indian tax you already paid. For property, the DTAA is a credit mechanism, not a discount, and it does not remove the Indian tax deducted at source.

This guide covers the property angle only: rent and sale gains for a UK-resident NRI. Interest, dividends, and pensions run on other articles with their own rules.

## Where is my India rent taxed?

In India first. Article 6 of the treaty says income from immovable property "may be taxed in the Contracting State in which such property is situated." Your Pune flat sits in India, so India taxes the rent at its normal slab rates. The treaty gives no rate cap and no exemption on this income.

Then a second time in the UK. As a UK resident you are taxed on worldwide income, so the same rent goes on your Self Assessment return through the SA106 foreign pages. The UK allows its own deductions, which differ from India's. The two taxable figures rarely match. See [NRI rental income tax in India](/guides/nri-rental-income-tax-india) for how the Indian side is computed.

The tenant is the collection point on the India side. A tenant paying rent to an NRI landlord must deduct TDS before paying you. The treaty does not switch this off. You recover any excess by filing an Indian return. See [TDS on rent for an NRI landlord](/guides/tds-on-rent-nri-landlord).

## Where is a sale gain taxed?

In both countries. Article 14 of the India-UK treaty takes the same shape as the India-US one: "each Contracting State may tax capital gains in accordance with the provisions of its domestic law." There is no treaty rate cap for property gains. India taxes your gain at 12.5% plus surcharge and cess on long-term holdings, computed in rupees under Indian cost rules.

The UK taxes the same disposal too. You report it on the capital gains section of your Self Assessment, computed in sterling using the exchange rates on the purchase and sale dates. A period of rupee weakness can make the sterling gain smaller than the rupee gain, and in some years the two point in opposite directions. Foreign Tax Credit Relief bridges the two bills so you are not taxed twice on the same gain.

## How do I avoid double tax as a UK resident?

Through Foreign Tax Credit Relief, not through a lower Indian rate. Article 24 of the treaty sets the rule: Indian tax paid on income or gains from sources within India "shall be allowed as a credit against any United Kingdom tax computed by reference to the same" income or gains. HMRC gives this relief inside your Self Assessment return.

Three points decide how much relief you keep:

- The credit is capped. Relief cannot exceed the UK tax on the same income. If the UK tax on your Indian rent is lower than the Indian tax you paid, the surplus Indian tax is not refunded by HMRC. It is lost.

- The two computations differ. India and the UK allow different deductions, so the taxed amounts differ, and the credit seldom cancels the UK bill to zero. Expect a residual on one side in many years.

- Indian TDS is a payment, not a final answer. The tax withheld at source in India counts toward the Indian tax you paid, but you still file the Indian return to fix the real liability before you know the credit figure for the UK.

## What the DTAA does for property income: the honest list

| Question | Treaty answer | Practical effect |
| --- | --- | --- |
| Indian rent taxed in India? | Yes, Article 6 | TDS by tenant, Indian return, slab rates |
| Indian property gain taxed in India? | Yes, Article 14 | 12.5% LTCG regime applies in full |
| Treaty rate cap on either? | No | No discount exists to claim |
| UK tax on either? | Yes, worldwide basis | Reported on Self Assessment |
| Double taxation relieved? | Yes, Article 24 | UK credit for Indian tax, capped at UK tax |

Anyone promising a "DTAA rate" on your Indian rent or sale gain is selling confusion. The treaty's value for property is the UK credit, nothing more.

## What documents do I need?

For the UK credit, your Self Assessment record. You claim Foreign Tax Credit Relief on the SA106 foreign pages, supported by proof of the Indian tax paid: the Indian return, challans, and the TDS certificate (Form 16A) from the tenant or buyer. Keep the rupee-to-sterling conversion basis you used.

For any treaty claim on the India side, a residency certificate plus Form 10F. Indian law asks a non-resident claiming treaty benefit to hold a Tax Residency Certificate and file Form 10F on the Indian e-filing portal. HMRC issues a Certificate of Residence that serves as the UK TRC. Form 10F is filed online and paired with the certificate. Where an Indian payer wants comfort that you have no business presence in India, a no-permanent-establishment declaration is added.

For property income the treaty gives no rate cut, so a UK-based owner needs the TRC less often than an owner claiming a treaty rate on interest or other income. Where it matters most: bank interest on your NRO account, and any case where a deductor asks for treaty proof before applying a lower rate.

## Selling Indian property from the UK: the sequence

The treaty changes nothing in this list, which is the point.

- Lower-TDS certificate before the sale, or the buyer withholds TDS on the gross sale price, roughly 13 to 14.95% including surcharge and cess. The certificate caps the deduction to the real gain. See [TDS on sale of property by NRI](/guides/tds-on-sale-of-property-by-nri).

- Sale deed, with a Power of Attorney executed in the UK if you are not flying in. The Indian High Commission in London attests POAs for use in India.

- Indian return claiming any exemptions and the TDS refund.

- Repatriation of the net proceeds to your UK account under the USD 1 million scheme, with Forms 15CA and 15CB. See the [repatriation guide](/guides/repatriating-property-sale-proceeds-nro).

- UK Self Assessment reporting the gain and claiming Foreign Tax Credit Relief for the Indian tax.

## Where this goes wrong

- A UK owner skips the Indian return because the UK taxes the income anyway. India taxed first, and without the Indian return the TDS refund lapses and the property's tax trail decays.

- Indian rent never appears on the UK return. HMRC reaches Indian income through information exchange, not luck. Correcting past years costs more than reporting did.

- The credit is claimed for more Indian tax than the UK tax on the same income, and the owner expects HMRC to refund the surplus. It does not. The excess Indian tax is unrelieved.

- The two tax years clash. India runs to 31 March, the UK to 5 April. A sale near the year boundary lands in different fiscal years on each side, and the credit is claimed in the wrong UK year.

- A TRC is obtained for the wrong period. Indian treaty claims need the certificate covering the income year, not the application date.

- An Indian exemption under section 54 or 54EC cuts the Indian tax, which cuts the UK credit, which raises the UK bill. An exemption that is a clean win for a Dubai seller can be diluted for a UK one. Model both returns together.

## How the UK differs from the UAE and the US

A [Dubai-based owner](/guides/dtaa-india-uae-property-owners) pays Indian tax and stops, because the UAE levies no personal income tax. A [US-based owner](/guides/dtaa-india-usa-property-owners) pays Indian tax, then US tax, then claims a credit on Form 1116, and often loses more to state tax that ignores the treaty. The UK sits closer to the US model: Indian tax first, UK tax second, UK credit for the Indian tax. The UK has no separate state income tax layer, which removes one leak the US seller carries.

## FAQ

**Does the India-UK DTAA reduce tax on my Indian rental income?**
No. India taxes the rent under Article 6 at its normal rates, and the tenant deducts TDS. The treaty's value is the UK Foreign Tax Credit Relief for the Indian tax paid, which stops the same rent being taxed twice. It gives no Indian rate cut.

**Where do I pay capital gains tax if I sell Indian property while living in the UK?**
Both countries tax the gain under Article 14. India collects first through TDS and your Indian return, at 12.5% plus surcharge and cess on long-term gains. The UK taxes the gain too and gives credit for the Indian tax under Article 24.

**Can the DTAA lower the TDS when I sell or rent?**
No. The treaty does not cap Indian tax on property income, so it does not lower the withholding. The route to a smaller deduction is a lower-TDS certificate from the Indian tax office, not the treaty.

**Do I need a TRC and Form 10F to sell my Indian flat?**
Not for the sale itself, which runs on Indian domestic law. A UK Certificate of Residence and Form 10F matter when you claim a treaty benefit in India, such as a lower rate on NRO interest. Property gains offer no treaty rate to claim.

**Will HMRC refund Indian tax higher than my UK tax on the same income?**
No. Foreign Tax Credit Relief is capped at the UK tax on that income. If the Indian tax is larger, the surplus is not repaid by HMRC. This is why matching the timing and the figures across both returns matters.

**How do I claim the credit in the UK?**
Report the Indian rent or gain on the SA106 foreign pages of your Self Assessment and claim Foreign Tax Credit Relief there, with proof of the Indian tax paid. Keep the Indian return, challans, TDS certificate, and your sterling conversion basis.

## UK-based, India-invested? We run the India side

66 MG Road executes the whole sale from where you sit: POA attested in the UK, lower-TDS certificate, registration, Forms 15CA and 15CB, and the wire to your UK account, with documentation packaged for your UK accountant's Foreign Tax Credit Relief claim. Teams in Mumbai, Pune, Bangalore, Hyderabad, Chennai, and Gurgaon. Itemized billing.

**Saurabh Garg, founder, 66 MG Road**

## Sources

- UK/India Double Taxation Convention, in-force text (HMRC): [https://assets.publishing.service.gov.uk/media/5a750f1940f0b6397f35d57c/india-dtc_-_in_force.pdf](https://assets.publishing.service.gov.uk/media/5a750f1940f0b6397f35d57c/india-dtc_-_in_force.pdf)

- The Double Taxation Relief (Taxes on Income) (India) Order 1993: [https://www.legislation.gov.uk/uksi/1993/1801/made](https://www.legislation.gov.uk/uksi/1993/1801/made)

- HMRC, tax on foreign income and Foreign Tax Credit Relief: [https://www.gov.uk/tax-foreign-income/taxed-twice](https://www.gov.uk/tax-foreign-income/taxed-twice)

- HMRC, Foreign notes (SA106): [https://www.gov.uk/government/publications/self-assessment-foreign-sa106](https://www.gov.uk/government/publications/self-assessment-foreign-sa106)

- Income Tax Department, DTAA texts: [https://www.incometaxindia.gov.in/pages/international-taxation/dtaa.aspx](https://www.incometaxindia.gov.in/pages/international-taxation/dtaa.aspx)

- Income Tax e-filing portal (Form 10F): [https://www.incometax.gov.in](https://www.incometax.gov.in)

## Compare and cost

- [The NRI Property Management Companies in India: A Comparison You Can Check](/guides/best-nri-property-management-companies-india)
- [What NRI Property Management Costs in India: The Four Models and What Hides in Each](/guides/nri-property-management-cost-india)
- [NoBroker NRI Services Review: What the Pages Promise and What They Leave Out](/guides/nobroker-nri-services-review)

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Source: [https://66mgroad.com/guides/dtaa-india-uk-property-owners](https://66mgroad.com/guides/dtaa-india-uk-property-owners) · 66 MG Road. Full LLM brief: https://66mgroad.com/llms.txt