India–United States DTAA rates for NRIs
The India–United States tax treaty (1989) caps the tax India can deduct on several kinds of income paid to residents of United States. Here are the rates and how to claim them.
Rates checked on against the treaty text.
| Income from India | Treaty rate | India's normal rate for non-residents |
|---|---|---|
| Interest (for example NRO deposits) | 10% if loan granted by a bank or similar financial institution (incl. insurance company); 15% in other cases | 30% plus surcharge and cess |
| Dividends from Indian companies | 15% if the beneficial owner is a company holding at least 10% of voting stock; 25% in other cases | 20% plus surcharge and cess |
| Royalties and fees for technical services | 15% (10% for equipment-rental royalties and ancillary services); Article 12 royalties and fees for included services | As per the Act |
| Gains on property in India | Taxable in India (Art 13: each country may tax gains under its domestic law) | Taxed in India |
Covers 'fees for included services' with a make-available test. The 25% treaty rate for a portfolio shareholder is higher than India's 20% domestic rate, so the lower domestic rate applies. The 10% interest rate applies only where a bank is the lender, so an NRI's bank deposit interest falls under the 15% rate.
How to claim the treaty rate
Give the payer, usually your bank or the company paying dividends, these documents before the payment:
- Tax Residency Certificate issued by the tax authority of the country of residence, valid for the relevant Indian tax year. It is uploaded with Form 41, along with the foreign Tax Identification Number (TIN).
- The self-declaration on Form 41 (formerly Form 10F), filed online with your PAN.
If tax was already deducted at the higher domestic rate, you can claim the difference back by filing an Indian income tax return. The tax paid in India can usually be set off against tax on the same income in United States, under that country's foreign tax credit rules.
Use the DTAA rate finder to compare countries, or read how NRIs claim treaty benefits.
Sources
Treaty articles have conditions and exceptions, such as beneficial ownership and limitation-of-benefit rules. This page is general information, not tax advice.