An Indian client deducted tax from your invoice

This is for a foreign company or a freelancer outside India who raises invoices on Indian customers and finds tax taken off before the money arrives. It is the payee's checklist. The Indian company's own filing is on the payer hub.

Last reviewed 26 October 2026Law as of 26 October 2026By Vipul Sharma, Founder · Reviewed by Preetesh Maloo, Chartered Accountant, NRI Tax Partner

Which situation are you in?

1. You want the Indian client to apply the treaty rate on the next invoice.
The client needs your tax residency certificate and Form 41 (formerly Form 10F) under section 159(8). Without them the Form 41 note says the payer deducts at the rate that applies under Indian law.
2. You want a lower or nil rate than even the treaty, or a rate fixed to your estimated income.
You apply on Form 128 (formerly Form 13) under section 395(1). The note lists a PAN as a document. A foreign entity's PAN application is Form 96.
3. The client has no PAN from you and is talking about a higher deduction.
That rule is section 397(2), formerly section 206AA. Rule 217 switches off section 397(2)(b)(i) for interest, royalty, fees for technical services, dividends and payments on transfer of a capital asset, if you give the documents the rule lists.
4. Tax was already taken at more than the treaty rate or more than the tax you owe.
The difference is claimed as a credit in the return for that year. The credit section in the site's old-to-new map is section 390, formerly section 199. The return form is not named on these pages.

Three different fixes

They are often mixed up, and they happen at different times.

You want	Who acts	Form
Treaty rate on the next payment	You give the client a tax residency certificate and Form 41	Form 41, formerly Form 10F
A certificate that tells the client to deduct less or nothing	You apply. The officer issues it. The client applies it	Form 128, formerly Form 13
Money already withheld above the right figure	You claim the credit in the return	Section 390, formerly section 199

The Indian client still has its own Form 145 and, often, Form 146. Those do not get your tax back. They let the bank send the payment.

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Questions

The Form 41 note says the treaty benefit is not available without a valid electronically filed Form 41 along with the tax residency certificate. Form 41 was Form 10F. The section is 159(8), formerly 90(5).

The credit is the same idea: tax was deducted at more than the final liability, and the return is how it comes back. The person claiming it here is a foreign company or a freelancer, the form is the company's return, and the PAN is the foreign entity's PAN where one is required.

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Who does the work

Who prepares the working, who reviews it, and who signs or files it is stated in the written scope for that engagement.

Corrections

26 October 2026. First published. Checked against the department note on 26 October 2026.