France NRIs: The 2024-26 India Tax Landscape, Plainly
TL;DR
Paris, Lyon, and Toulouse have growing Indian communities. Your India-France DTAA is intact. The Nestlé SA ruling and four India-side changes in 2024-26 matter more than you think.
TrustNRI Editorial · Reviewed by ICAI-registered Chartered Accountants
The MFN shadow over France NRIs
Historically, France NRIs could argue for a 5% dividend rate under the India-France treaty's MFN clause, pointing to India's later treaties with Lithuania and Colombia. In October 2023, the Indian Supreme Court in AO vs Nestlé SA held that MFN clauses are not self-executing without a CBDT Section 90(1) notification. CBDT has not issued one.
Practical effect: the default treaty rate of 10% on dividends is what applies for France NRIs right now. Any 5% claim is being denied at the AO level and is stuck in litigation. Don't bank on the lower rate until the notification comes.
The 10% interest rate, 10% dividend rate, and source-country capital gains taxation remain unchanged and uncontested.
Nestlé SA, Section 148, Budget 2024: the trio that matters
**Section 148.** Reassessment window cut to 3/5 years from the old 10. AY 2021-22 and older are now time-barred under the 3y3m window (FA(No.2)2024). Big relief for anyone worried about ancient open matters.
**Faceless mandate.** The Telangana HC and Supreme Court (July 2025) shut down JAO-issued Section 148 notices. All reassessments must go through NFAC. Check any notice you have.
**Budget 2024.** 12.5% flat on NRI property LTCG, no indexation. From 23 July 2024. France NRIs selling Indian property pay this on the full gain without inflation adjustment.
**Black Money Act.** ₹20 lakh safe harbour for movable foreign assets, Finance (No. 2) Act 2024 amendment effective 1 October 2024. Useful for returning residents.
What to actually do in 2026
If your previous Indian filings claimed a 5% MFN dividend rate, review them. Be prepared for AO-level denial and possible rectification.
If you're selling Indian property, apply for Form 13 lower-TDS certificate before the sale. Budget 2024 means the buyer will otherwise withhold 12.5% on the full sale price.
If you've been in France long enough to consider the Impatrié status or other Franco-Indian tax optimisation, coordinate with a French expert-comptable in parallel with a TrustNRI India-side CA. The interest and dividend caps still work, but the MFN-based aggressive positions don't, at least not without a fight.
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