Saudi NRIs: India Owes You Money. Yes, Even Blue-Collar Workers.
TL;DR
India's DTAA with Saudi Arabia offers 5% dividend TDS, the lowest available. From Riyadh IT engineers to Dammam construction workers, everyone qualifies. Almost nobody claims it.
By Vipul Sharma, Founder
Reviewed by Preetesh Maloo, Chartered Accountant, NRI Tax Partner
The best dividend rate India offers. And it's for Saudi NRIs.
India's DTAA with Saudi Arabia caps dividend TDS at 5%. Five percent. Compare that to the 20% default NRIs face. That's a 75% reduction.
For interest income (your FDs, NRO savings), the treaty rate is 10%. Default is 30%. That's a 20% saving on every rupee of interest.
These are among the best DTAA rates India offers to any country. Better than the US (15% on both). Better than UAE (12.5% interest, 10% dividends). Only Malaysia and Hong Kong match the 5% dividend rate.
Yet here's the reality: of the 2.5 million Indians in Saudi Arabia, the vast majority have never heard of DTAA. They're sending money home, putting it in FDs, maybe buying some shares, and 30% TDS is being quietly deducted from their FD interest and 20% from their dividends. Every year. For years.
India-Saudi 5% dividend = the lowest rate in any India DTAA
Only Malaysia and Hong Kong match the 5% dividend cap. Compare to UAE (10%), or the 20% default that US and Canadian individuals are stuck with, and Saudi NRIs have the strongest position on dividend recovery. Interest cap of 10% also beats UAE's 12.5%.
Blue-collar workers deserve this too. Not just IT professionals.
DTAA isn't just for software engineers in Riyadh. The construction worker in Dammam with a ₹5 lakh FD back home? He's losing ₹10,500 in excess TDS every year. The nurse in Jeddah with ₹8 lakh in FDs? She's losing ₹16,800.
These aren't people with tax advisors. They don't have CAs. Many don't file ITR at all because they think NRIs don't need to. But if TDS has been deducted, and it has, automatically, the only way to get the excess back is to file.
The average Saudi NRI loses approximately SAR 1,700 per year in excess TDS on Indian investments. For blue-collar workers earning SAR 2,000-4,000/month, that's nearly a month's rent in shared accommodation.
We've seen this repeatedly: an NRI in Al Khobar with ₹12 lakh in various FDs, TDS deducted at 30% for 5 years, never filed a return. Total recoverable: ₹1.7 lakh of principal, with no Section 244A interest on a claim recovered by condonation. That's life-changing money for someone earning a modest Gulf salary.
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ZATCA TRC: bureaucratic, but worth every minute
Saudi Arabia's tax authority is ZATCA (Zakat, Tax, and Customs Authority). Getting a TRC from ZATCA isn't as smooth as the UAE's digital process, but it's completely doable.
Requirements: valid iqama (residency permit), employment contract or CR (commercial registration for business owners), proof of Saudi address, and a processing fee of around SAR 100.
Process: Apply through the ZATCA portal or visit a ZATCA office. Processing takes 2-4 weeks. The certificate confirms your Saudi tax residency for the relevant period.
Common hurdle: ZATCA sometimes asks for a letter from your employer confirming your Saudi employment. Get this in advance. Another issue: the TRC might be in Arabic only. Indian banks generally accept it, but having an attested English translation helps avoid branch-level confusion.
One tip from our experience: apply for TRC in January-February for the Indian financial year ending March 31. Don't wait until July when you're filing ITR. Bureaucracies move slowly. Give yourself a buffer.
Authority
ZATCA
Processing
2-4 weeks
Fee
~SAR 100
Apply by
Jan to Feb (for India FY ending 31 March)
The math: what an average Saudi NRI is losing
Let's do the numbers for a typical Indian in Saudi Arabia with modest savings:
₹10 lakh in SBI NRO FD at 7% = ₹70,000 interest
TDS at 30% default = ₹21,000
TDS at 10% DTAA rate = ₹7,000
Annual saving: ₹14,000
Add ₹2 lakh in Infosys shares, dividend yield 2% = ₹4,000
TDS at 20% default = ₹800
TDS at 5% DTAA = ₹200
Annual saving: ₹600
Total annual saving: ₹14,600 (approximately SAR 640)
Over 5 years with Section 244A interest: approximately ₹86,000
Now scale this up. An engineer with ₹30 lakh in FDs and a small MF portfolio? Annual DTAA saving crosses ₹45,000. Five-year recovery with interest: over ₹2.5 lakh.
These are conservative numbers. We've processed claims for Saudi NRIs recovering ₹4-5 lakh for accumulated past years. The money is there. It just needs someone to file the right forms.
₹10 L FD + ₹2 L Infosys: one year of unclaimed DTAA
₹10 L NRO FD interest @ 7%
₹70,000
Annual interest on a modest Gulf NRI's typical NRO deposit.
Default 30% TDS vs DTAA 10%
₹14,000 saved
Article 11 cap. Saving = ₹21,000 default − ₹7,000 treaty.
₹2 L Infosys shares, 2% yield
₹4,000 dividend
Small portfolio, illustrative.
Default 20% vs DTAA 5%
₹600 saved
Article 10 cap. India's best dividend rate.
Annual total saved
₹14,600 (~SAR 640)
Per year on this modest portfolio.
5 years + Section 244A interest
~₹86,000
Past 5 Assessment Years recoverable under Section 119(2)(b) (CBDT Circular 11/2024). Section 244A adds 6% simple interest on the refund.
Engineer with ₹30 L in FDs + a small MF portfolio? Annual saving crosses ₹45,000, over ₹2.5 L recoverable across 5 years. Conservative numbers; we've processed Saudi NRI claims recovering ₹4-5 L.
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.
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.
Treaty rate on Indian dividends
Right now: Domestic rate 20% plus surcharge and cess; most treaties cap it at 10-15% under Article 10
Where it works differently
- A TRC and Form 10F are furnished to the registrar or company
- The treaty rate applies at source. Without them the full 20% plus surcharge and cess is deducted and you recover it by filing.
- s.90(4) and (5).
- The exact rate matters
- It is per treaty, not a single number. Check the country entry. Some treaties are 10%, some 15%, and Italy's dividend article can be WORSE than the domestic rate.
- Never quote one figure across countries.
- Claiming the treaty rate
- The s.115A(5) filing exemption is lost, so an Indian return becomes necessary.
- That relief needs TDS at not less than the s.115A rate.
Commonly got wrong
- The DTAA rate on dividends is 10%. It varies by treaty. Quoting one number across countries is wrong, and at least one treaty is worse than domestic law.Check your country's Article 10 rate, commonly 10% or 15%, against 20% plus surcharge and cess under domestic law.
Treaty rate on Indian interest
Right now: Domestic rate 30% plus surcharge and cess on NRO interest; most treaties cap it at 10-15% under Article 11
Where it works differently
- The account is NRE or FCNR
- Interest is exempt entirely while you are a FEMA non-resident. There is no rate to reduce.
- s.10(4)(ii) and s.10(15)(iv)(fa).
- The bank refuses the treaty rate without a PAN
- Rule 37BC and the Serum Institute / Danisco line say s.206AA cannot override a treaty rate.
- See the case register.
- The exact rate matters
- Per treaty. Do not quote a single figure across countries.
Commonly got wrong
- All NRO interest is taxed at 30%. That is the domestic default. With a TRC most treaties bring it to 10-15%.30% plus surcharge and cess by default. With a TRC and Form 10F, your treaty's Article 11 rate applies, commonly 10-15%.