Renting property to an embassy in Delhi is the most sought-after tenancy a South Delhi landlord can land, and the one most often signed on a draft nobody read closely. Missions and multinationals pay on time and stay for years, but they bring a diplomatic exit clause, an immunity question, a different tax position and a foreigner-reporting duty that changed in 2025.
A foreign mission, or a diplomat it posts to Delhi, takes a house on a written lease of two to three years, usually with a diplomatic clause allowing early exit on transfer or recall. The lease may be in the mission’s name (the stronger paper) or the diplomat’s. Either way the tenant carries immunity under the Vienna Convention, and a suit against a foreign State or an envoy needs the Central Government’s written consent under Section 86 CPC, so the paper and the deposit, not the courtroom, protect you. On tax, the rent is still your income; a corporate tenant deducts 10% TDS on rent above ₹50,000 a month, while whether a mission deducts varies. No GST is normally due when a mission holding a UIN rents a home, but a GST-registered company renting one pays 18% under reverse charge.
Renting property to an embassy in Delhi is a niche we have worked in for decades, from Vasant Vihar bungalows for deputy heads of mission to Anand Niketan floors for first secretaries and a steady line of corporate leases for expatriate managers. Below: the two kinds of foreign tenant, what a mission inspects, the key clauses, immunity, and the tax, GST and reporting rules as of October 2026. Stamping and registering a lease are covered in our rent agreement registration guide, not here.
“Embassy tenant” covers two very different counterparties, and immunity, TDS, GST and who signs all turn on which one you have.
| Point | Mission / diplomatic lease | Corporate expat lease |
|---|---|---|
| Who signs | The embassy or high commission, or the diplomat personally | The Indian company; occasionally the expatriate personally |
| Immunity | Yes; suits need Central Government consent (Section 86 CPC) | None; an ordinary company |
| TDS on rent | Practice varies; many missions pay gross (desk observation) | 10% on rent above ₹50,000 a month (Section 393(1), formerly 194-I) |
| GST | Normally nil on our reading: a UIN holder is not a “registered person” | 18% paid by the company under reverse charge if it is GST-registered |
| Exit clause | Diplomatic clause on transfer, recall or a break in relations | Transfer clause, often after a lock-in |
| Foreigner reporting | Ask the mission in writing; confirm with the FRRO | Form-III within 24 hours of the foreigner’s arrival |
UN agencies and other international organisations usually carry their own immunities; draft as for a mission.
Chanakyapuri itself is mostly government and mission land, so mission staff spread into nearby colonies: Vasant Vihar and Westend, Shanti Niketan and Anand Niketan to the south-west; Golf Links, Jor Bagh and Sundar Nagar in Lutyens’ edge; and Panchsheel Park, Defence Colony and Greater Kailash further south. Our Chanakyapuri guide explains why the enclave rarely comes up for private lease.
A mission’s property officer works from a checklist written in their capital. In our experience the houses that lease fastest tick these boxes:
A boundary wall, a manned gate and guard room, CCTV and secured ground-floor openings. A security officer often visits first; through-roads score badly.
Full-load power backup, not a token inverter, and documented water storage and filtration. Keep the generator’s service record ready.
At least two covered car spaces and staff quarters with their own entrance. A stilt-plus-four floor with one parking slot is a hard sell to a mission, an easier one to a company.
Whether the house is let bare or furnished to a list, an annex of every item and its condition becomes the check-out inventory.
A named contact, written response times for faults, and annual servicing of air-conditioning, backup and pumps, with a schedule of who pays.
Sale deed, latest MCD property tax receipt, completion certificate where one exists, and every owner’s ID. Missions’ own legal checks fail family disputes and GPA chains.
The most consequential choice is the name on the lease. Our desk’s preference, wherever the mission agrees, is a lease signed by the mission itself, with the diplomat named as occupant. A mission is still in Delhi after the diplomat has gone; a diplomat may leave on a few weeks’ notice and is immune from civil suit for most purposes. If a mission will only lease in the officer’s name, ask for a mission letter confirming the posting and naming a contact.
| Clause | What a mission usually asks for | What a landlord should hold out for |
|---|---|---|
| Diplomatic / transfer clause | Early exit on transfer, recall, end of posting or a break in relations | Two to three months’ notice, a minimum lock-in and written proof of transfer |
| Rent in advance | Quarterly to yearly in advance is common (desk observation) | A clear rule for refunding unexpired advance rent on early exit |
| Security deposit | Modest; some missions resist deposits | A deposit sized to the inventory and notice period, refunded after joint check-out |
| Escalation | A fixed annual step, often renegotiated | Escalation written in for every year and any renewal |
| Alterations and security works | Grilles, cameras, guard rooms, sometimes blast film | Prior written consent, no structural change, and your choice on removal at exit |
| Disputes | Amicable settlement | A named escalation path, and an express waiver of immunity for lease disputes if the mission will give one (Article 32 requires any waiver to be express) |
Registration follows the ordinary rules: a lease for more than a year, or from year to year, must be stamped and compulsorily registered, and diplomatic leases almost always run longer. They also sit outside the Delhi Rent Control Act, which excludes premises let at more than ₹3,500 a month, so the contract itself governs.
India gives the 1961 Vienna Convention on Diplomatic Relations the force of law through the Diplomatic Relations (Vienna Convention) Act, 1972. Four provisions matter to a landlord.
Mission premises are inviolable (Article 22), and they include buildings used for the mission irrespective of ownership, including the head of mission’s residence (Article 1). If your house is the ambassador’s residence, Indian officials, a court bailiff included, cannot enter without the head of mission’s consent. A diplomat’s private residence enjoys the same inviolability (Article 30), so even a lease in an officer’s own name creates a house you cannot enter or repossess by force while they occupy it.
Diplomatic agents are immune from civil jurisdiction (Article 31), save a narrow exception for a “real action relating to private immovable property” the agent holds other than for the mission. A landlord’s claim against a diplomat-tenant is unlikely to fit that exception; do not plan around it.
Section 86 of the Code of Civil Procedure bars suing a foreign State, ambassador or envoy without the Central Government’s consent, certified in writing by a Secretary. Consent may be given where the State holds immovable property within the court’s limits and is sued over it, or has waived the privilege. It is a government decision, not a formality.
Eviction by suit is slow and uncertain against a mission and practically unavailable against a diplomat who will not cooperate. Self-help is out of the question: cutting power or water to an inviolable residence is unlawful and a diplomatic incident. The protections that work are commercial: advance rent, a proper deposit, a lease in the mission’s name, an exit inventory, and the mission’s interest in its reputation. Missions generally settle disputes administratively (desk observation); write the paper for the rare one that does not.
We are not aware of any Ministry of External Affairs approval a landlord must obtain; missions deal with the MEA’s Protocol Division on their side. If a mission says an MEA step applies, get it in writing.
The old Foreigners Act regime and “Form C” are gone. The Immigration and Foreigners Act, 2025 came into force on 1 September 2025, with the Immigration and Foreigners Rules, 2025 notified the same day. Under Rule 17, whose definition of accommodation expressly includes rented accommodation, the keeper must report a foreigner’s arrival on Form-III (the successor to Form C) within 24 hours, and the departure likewise, through the e-FRRO portal at indianfrro.gov.in. OCI cardholders, previously exempt, are now covered. Delhi Police tenant verification is a separate step.
For a corporate expat tenant, register once on e-FRRO and file Form-III for each foreign occupant, family included. For diplomats it is less clear: the 2025 exemption order relieves certain diplomatic and official passport holders only of the visa requirement, and we have found no published exemption from accommodation reporting. Ask the mission in writing and, if in doubt, the FRRO.
Under the Income-tax Act, 2025, in force from 1 April 2026, the old TDS sections on rent sit in the tables of Section 393:
| Tenant | Old section | Rate on building rent | Threshold |
|---|---|---|---|
| Company, firm or other “specified person” (includes an individual/HUF over the tax-audit turnover limits) | 194-I | 10% | Rent above ₹50,000 for a month or part of a month |
| Other individual or HUF (e.g. an expat paying personally) | 194-IB | 2% | Rent above ₹50,000 for a month or part of a month |
| Any tenant paying a non-resident landlord | 195 | At the rate in force for non-residents: 30% plus surcharge and 4% cess (31.2% where no surcharge applies), unless a lower-deduction certificate is obtained | No threshold |
Missions are the grey area. We have found no provision expressly exempting a foreign mission from deducting, and our desk’s observation is that practice varies by mission: some pay gross, some deduct and issue certificates. Either way, the Vienna Convention is explicit that a mission’s tax exemption does not cover taxes payable by those who contract with it (Article 23(2)). The rent is fully your income; if nothing is deducted, provide for advance tax.
The computation (after MCD tax and the 30% standard deduction) is in our guide to tax on rental income. Ask your CA how yearly-in-advance rent will be taxed before agreeing to it.
If you live abroad, the tenant must deduct under the non-resident provision at the much higher rate unless you obtain a lower-deduction certificate before the lease starts. Expect to give your PAN, tax residency and an NRO account for the rent, and appoint a local manager under a power of attorney; missions want one person in Delhi who answers the phone. When the time comes to exit, our guide for NRIs selling property in Delhi covers the repatriation side.
Until July 2022, renting a residential dwelling for use as a residence was exempt from GST whoever the tenant was. From 18 July 2022 (Notifications 04/2022 and 05/2022-Central Tax (Rate)), the exemption was withdrawn where the dwelling is rented to a registered person, who pays GST at 18% under reverse charge; the landlord does not charge it and needs no GST registration for this rent. From 1 January 2023 (Notification 15/2022), a registered proprietor renting a home in his personal capacity for his own residence is exempt again.
For a corporate expat lease, the Indian company, almost always GST-registered, pays the 18% itself.
For a mission, it turns on a definition. Embassies and international organisations hold a Unique Identity Number (UIN) under the GST law, mainly to claim refunds of tax on their purchases. Section 2(94) of the CGST Act defines a “registered person” as one registered under Section 25 but expressly excludes a person holding a UIN. So a home rented to a mission is not rented to a “registered person”, the residential exemption still applies and no GST is due. This is our reading of the statute, not a circular addressed to missions; if a mission’s finance office disagrees, have your CA reply in writing. Commercial premises leased to a mission (a chancery, an office) are taxable in the ordinary way.
We do not publish rent figures for diplomatic leases: mission budgets are set by rank and country and are confidential. A secured house with staff quarters in Vasant Vihar, Westend, Shanti Niketan, Golf Links or Jor Bagh competes for the larger budgets; a modern builder floor in Anand Niketan, Panchsheel Park or Defence Colony more often goes to mid-ranking diplomats and corporate expatriates. For your own house, ask our desk.
Brokerage usually follows the Delhi convention of one month’s rent per side (desk observation); some missions and relocation firms pay their side under a framework agreement. The detail is in our note on property dealer commission in Delhi, and the common owner questions are answered on our renting FAQ.
A mission is the best tenant in Delhi until the day it is not, and on that day you cannot sue your way out. Put the lease in the mission’s name, take the rent in advance and write the exit before you hand over the keys.
We know what mission officers inspect, and we draft the diplomatic clause, advance-rent refund and inventory so the exit is as clean as the entry.
Market practice (lease terms, advance rent, missions’ TDS practice, colonies, brokerage) reflects SouthDelhiFloors desk observation as of October 2026. Legal positions summarised: the Vienna Convention on Diplomatic Relations, 1961 (Articles 1, 22, 23, 30, 31, 32), given effect by the Diplomatic Relations (Vienna Convention) Act, 1972; Section 86 of the Code of Civil Procedure, 1908; the Immigration and Foreigners Act, 2025 and Rules, 2025 (Form-III via e-FRRO); Section 393 of the Income-tax Act, 2025 (formerly Sections 194-I, 194-IB and 195 of the 1961 Act); Notifications 04/2022 and 05/2022-Central Tax (Rate) and 15/2022-Central Tax (Rate), and Section 2(94) of the CGST Act, 2017. The GST position for UIN-holding missions is our reading of the statute. Take professional advice before signing.
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