Income tax in india on rental income?

hi

am an NRI, and i have a flat and a commercial space in mumbai,that has been rented out.

can any one please tell me do i need to pay income tax on it.
is there any way, i could get exempt for it by having/gifting the property onto my parents name

If the flat is self occupied (by your parents), then it is tax free. Regarding the commercial property and flat are given on rent, then you have to pay income tax. The basic exemption for NRI is limited to 1,10,000 for FY:2007-08 (Rs.1.5 lakhs next year). Over and above the basic exemption limit, you have to pay tax at slab rates.

Example:(Rent, Municipal tax, 30% rebate on two properties)

Tax Calcu. for MALE -Tax free Amt. Rs.110000

315,000 = Gross Total income (Regular)
000,000 = LESS: Deductions U/Chapter IV-A (80C Etc.,)

RENTAL INCOME CALCULATION (on 2houses)

500,000 = Rent received during financial year
050,000 = LESS: Municipal Taxes Paid.
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450,000 = Balance income after Municipal taxes
135,000 = LESS: 30% Deduction for repairs. (even if you do not repair)
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315,000 = Balance after Municipal taxes & 30% Dedu.
000,000 = LESS: Interest Paid on house loans.
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315,000 = Net Income from house peoperty
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315,000 = Net total income taxable @ Slab Rates
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004,000 = Tax @10% between 1.1 to 1.5 lakhs on 040,000
100,000 = Tax @20% between 1.5 to 2.5 Lakhs on 100,000
019,500 = Tax @30% on > 2.5 lakhs on Rs. 065,000
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043,500 = Gross Tax (As per slabe rates) on 205,000
000,000 = ADD: S.T.C.G Tax-Shares/ M.F @10% on 000,000
000,000 = ADD: L.T.C.G Tax on Property @20% on 000,000
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043,500 = Total of Narmal + Spl. Rate Tax.
001,305 = ADD: Education cess @ 3% on tax.
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044,805 = Net Total Tax Payable.
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This way you calculate the tax liabulity. If you do not want to pay tax, then you can gift the house to your parents. Gifting property to parnts are tax free. Before you actually gift it, please consult a C.A (Tax consultant for more understanding).