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Avatar2000;256399An NRI receiving ~ Rs. 6-7 lakhs of annual rental income is subject to taxes in India, not the US taxes, am I correct?

How does one pay taxes in India for this income? What's the deadline for paying taxes in India?

All of this money will be spent on paying back the housing loan and maintaining the apartments at least in the first 2 years. Would I be able to deduct any of these expenses in India?

Thanks in advance!

You are most definitely subject to US taxes if US citizen/GC/resident. You can claim a credit for any taxes paid on rental to India, but you are subject to US taxes. For US taxes, you can treat the same way you would treat a US rental property and deduct mortgage interest, repairs etc.

Let me give Indian Tax Calculation.

If you have a rental income of 6 lacs, 30% deduction towards maintenance is allowed. YOur net taxable income would be 4.2 lacs. Max of 1.5 lac is further exempted on the interest charges by the bank for home loan. Ask the bank to provide you the break-up of principal and interest at the end of each fiscal year.

With the above deductions, your net income would be 2.2 lacs. Upto 1.6 lacs there is no income and next 60K, you need to deduct 10% . Hence your tax liability is 6K per annum for the rental income of 6 lacs with housing loan.

If you are investing into tax exempt products such as LIC payment, ELSS, ULIP, Tax saving FD, you don't have to pay even 6K and no tax is applicable to you. You don't have to even file the returns.

Hope this helps.

You do need to file Indian tax return if you are above exemption limit, even if no tax is due.

Also, for someone with US tax to pay as well, saving in Indian tax-exempt products doesn't help, since US will not normally consider them tax exempt (except possibly some LIC products). And if you are a US person, be sure to report any bank account into which you deposit this income.