Oman's new DTAA protocol. Small change, big recovery window.
TL;DR
The 2025 protocol to the India-Oman DTAA didn't rewrite the treaty. It tightened three clauses. If you're an Omani NRI with NRO interest or Indian dividends, here's what's different and what stays the same.
By Vipul Sharma, Founder
Reviewed by Preetesh Maloo, Chartered Accountant, NRI Tax Partner
The 3 things the protocol actually changed
India and Oman updated their DTAA in January 2025 via a protocol. The treaty from 1997 stayed in place. Three articles got tightened.
1. Article 11, interest. Rate unchanged at 10%. Beneficial-ownership language added under Rule 21AB to block shell routing.
2. Article 13, capital gains. Source-taxed stays, but the protocol closes a grandfathering loophole from 2007. New holdings get taxed in India at sale.
3. Article 25, exchange of information. Both countries now share financial account data automatically. Your Muscat bank statements can be seen by India's tax office under CRS.
That's it. The 10% ceiling stays. Your Form 10F routine doesn't change. But past-year recovery still works under Section 119(2)(b).
What this means for your NRO interest
Nothing bad. The 10% treaty rate still beats the 30% default rate under Section 195.
A ₹20 lakh NRO FD at 7% yields ₹1.4 lakh a year. At 30% default TDS, you lose ₹42,000. At 10% treaty, you lose ₹14,000. The gap is ₹28,000 a year.
Over 5 past Assessment Years, that's ₹1.68 lakh of principal recoverable, and that is the whole figure: Circular 11/2024 allows no Section 244A interest on a claim recovered by condonation.
The protocol doesn't block past-year recovery. Section 119(2)(b) still applies. Your TRC from the Oman Tax Authority and your Form 10F are still the only two documents you need.
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Why the Oman TRC is faster than most Gulf countries
The Oman Tax Authority (OTA) issues TRCs digitally through the MyTax portal. Most GCC countries still run paper processes.
You submit your Civil ID, residence card, salary certificate from your Omani employer, and proof of 183+ days physical presence in Oman during the calendar year. Pull your travel history from the Royal Oman Police online portal.
Cost: OMR 10 (~₹2,000). Timeline: 1-2 weeks for clean applications.
The TRC covers one calendar year. Most Omani NRIs need to renew before March every year so there's no gap during the Indian financial year rollover.
The grandfathering change and what it means for your Indian shares
The 2025 protocol narrowed a grandfathering exemption from 2007. Here's the short version.
Before 2017, capital gains on Indian-listed shares sold by an Oman resident were exempt from India tax under Article 13 of the old treaty. Post-2017, India shifted to source taxation but grandfathered pre-April-2017 holdings.
The 2025 protocol tightens the grandfathering test. Any shares acquired after April 2017 are definitively taxable in India at sale. Shares held before April 2017 keep the old exemption.
If you've been sitting on Indian equity since 2005, no change. If you added to your portfolio in 2019, that slice is source-taxed now. Run the dates before you sell.
Past-year recovery still works, here's the math
Protocol or no protocol, Section 119(2)(b) gives you 5 Assessment Years.
An Omani NRI with a ₹30 lakh NRO FD earning 7% over 5 Assessment Years has paid ₹3.78 lakh in TDS at the 30% default rate. At the 10% treaty rate, it should have been ₹1.26 lakh. The gap: ₹2.52 lakh.
Add Section 244A interest at 0.5% per month (≈ 6% p.a. simple) of delay. The oldest year contributes roughly 30% interest on top. Total recovery range: ₹2.9L to ₹3.1L depending on how old the TDS is.
One condonation application, one CA on your side, one unchanged bank account. The refunds land one year at a time over 4-8 months.
What we do for Omani NRIs
Upload your 26AS. Free. We read it line by line, match every TDS entry against the 10% treaty rate, and quote the recoverable amount before you pay a rupee.
If you engage us, a GCC-specialist CA files the current year plus Section 119(2)(b) condonation for past years. We handle Oman Tax Authority correspondence if your TRC needs touch-ups.
Success-fee based on recovery, paid only after the refund credits your NRO. No recovery, no fee. Form 10F / Form 41 renewal after that is a small annual flat fee.
If you'd rather talk first, book free CA appointment. We explain the math, quote the fee, and you decide.
Frequently asked questions
Q: The protocol talks about beneficial ownership. Am I affected?
A: Only if you were routing Indian income through a shell. Individual Omani residents with NRO accounts and Indian bank FDs are still direct beneficial owners. Nothing changes.
Q: Do I need a new TRC under the protocol?
A: No. Your existing Oman Tax Authority TRC is fine. Just make sure it matches the Indian financial year period you're claiming for.
Q: Can my mutual fund gains also be recovered?
A: Only if TDS was deducted. Equity MF LTCG is 12.5% flat from Finance Act 2024; DTAA rarely goes lower for equity. Debt MF is fully slab-rated from April 2023. We'll tell you honestly if there's nothing to recover.
Q: I've never filed an Indian ITR. Can I still claim?
A: Yes, that's exactly what Section 119(2)(b) is for. We file the past-year ITRs fresh, claim the treaty rate, and pair them with the condonation application. Common path.
Country guides mentioned
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The exceptions that change the answer
Where the general rule stops applying to you
Every rule below has a carve-out, a cut-off date or a condition that flips the answer. These are the ones that decide real cases.
NRO account: what it costs and what it caps
Right now: Interest taxed at 30% plus surcharge and cess; repatriation capped at USD 1 million a financial year
Where it works differently
- A TRC and Form 10F (Form 41 from 1 Apr 2026) are furnished
- The treaty rate applies to the interest, commonly 10-15% under Article 11 instead of 30% plus surcharge.
- s.90(2). This is the single largest recurring recovery item for most NRIs.
- Remitting out
- Form 15CA is needed, plus Form 15CB from a CA where the remittance is chargeable and above Rs 5 lakh in the year.
- Rule 37BB.
- Joint holders
- The USD 1 million ceiling is per person per financial year, so joint holders each have their own.
- FEMA 13(R).
Commonly got wrong
- NRO interest is taxed at 30%. Incomplete. Surcharge and 4% cess sit on top, and a treaty can cut it to 10-15%.30% plus surcharge and cess by default, but 10-15% under most treaties if you hold a TRC and file Form 10F.
Condonation of delay window for refund and loss claims
Right now: 5 years from the end of the assessment year
Where it works differently
- The claim arises from a court order
- Different limitation applies. The period the matter was pending is generally excluded.
- Para in Circular 11/2024.
- Deciding authority
- Tiered by claim amount across Principal Commissioner, Chief Commissioner and CBDT.
- Circular 11/2024 monetary limits.
Commonly got wrong
- The condonation window is six years. Circular 9/2015 was superseded on 1 October 2024.Five years, per Circular 11/2024.
TDS on NRO account interest
Right now: 30% plus surcharge and cess
Where it works differently
- A valid TRC and Form 10F (Form 41 from 1 Apr 2026) are furnished
- The treaty rate applies, commonly 10-15% under Article 11.
- s.90(2) gives the more beneficial of treaty or Act.
- No PAN is furnished
- s.206AA imposes at least 20%, but Rule 37BC allows escape by furnishing name, address, TIN and TRC. Courts have also held s.206AA cannot override a treaty rate.
- Rule 37BC + settled case law.
- Claiming the treaty rate at source
- The s.115A(5) filing exemption is lost, so an Indian return becomes necessary.
- That exemption requires TDS at not less than the s.115A rate.
- The account is NRE or FCNR instead
- Interest is exempt and no TDS applies, while the holder is a FEMA non-resident.
- s.10(4)(ii) and s.10(15)(iv)(fa).
Commonly got wrong
- NRO interest TDS is 30%. Incomplete. Surcharge and 4% cess sit on top, so the effective rate is higher.30% plus surcharge and cess, around 31.2% at the base level.
- You can file Form 15G/15H to stop NRO TDS. Those are resident-only declarations. An NRI filing one makes a false declaration.Use Form 13 (Form 128 from 1 April 2026), or claim the treaty rate with a TRC.