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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 instead

NRE interest is exempt only while the individual meets the FEMA residence-outside-India condition or is permitted by RBI to maintain the account, and the account is maintained in accordance with the applicable FEMA rules. Income-tax non-resident or RNOR status alone does not establish this exemption.

Income-tax Act 2025 Schedule IV, entry 1 (retaining the earlier s.10(4)(ii) conditions): https://www.incometaxindia.gov.in/w/schedule-iv-4

The deposit is FCNR instead

The exemption covers interest from a qualifying foreign-currency deposit with a scheduled bank whose acceptance of the deposit is approved by RBI, paid to a non-resident or a resident but not ordinarily resident (RNOR) under income-tax law. Check the deposit and residence conditions; FEMA non-residence alone does not establish the FCNR exemption.

Income-tax Act 2025 Schedule IV, entry 14 preserves s.10(15)(iv)(fa) subject to its conditions: https://www.incometaxindia.gov.in/w/schedule-iv-4 ; underlying conditions: https://www.incometaxindia.gov.in/w/section-10-62

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.

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.

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%.