Section 393 rates when you pay a non-resident
A company's accounts team choosing the rate to withhold before a remittance. The table below is only the rows whose rate is printed in section 393(2). It is not a substitute for the Finance Act rate on a royalty, a service fee, a dividend or ordinary interest.
Where the rate actually sits
Section 393(2) is the deduction on sums paid to a non-resident or a foreign company. Serial 17 of that table is the row the Form 145 note points at for a payment that is not salary: any interest other than the interest already listed at serials 2, 3, 4 and 5, or any other sum chargeable under the Act. The rate printed for serial 17 is rates in force, not a single percentage.
Deduction is at the earlier of credit or payment. Note 3 to serial 17 says interest payable by the government, a public sector bank or a public financial institution is deducted only at payment. The same note says the duty applies whether or not the non-resident has a residence, a place of business, a business connection, or any other presence in India.
The department's TDS rates page for assessment year 2026-27 still speaks in 1961 Act section numbers and says it contains that Act as amended by the Finance Act, 2026. It also says the TDS rate is increased by the applicable surcharge and health and education cess. This page does not restate a foreign company's surcharge schedule.
Rates printed in section 393(2)
These percentages are copied from the section text checked on 26 October 2026. Rows whose rate did not appear as a number in that text are omitted on purpose. Read the section for the conditions, the dates and the payee.
| Serial | What it covers, in short | Rate printed in the section |
|---|---|---|
| 1 | Income in section 211 of a non-resident sportsman who is not an Indian citizen, or a non-resident sports association | 20% |
| 2 | Approved foreign-currency interest on the loans and long-term bonds the row describes | 5% |
| 3 | Interest on a rupee denominated bond issued before 1 July 2023 | 5% |
| 4 | Interest on a long-term or rupee bond listed only on an IFSC exchange | 4% or 9%, depending on the issue date in the row |
| 5 | Interest from an infrastructure debt fund in the schedule the row names | 5% |
| 6 | Specified distributed income of a business trust | 5% or 10%, depending on the schedule entry |
| 12 | Long-term capital gains on transfer of the offshore-fund units in section 208 | 12.5% |
| 14 | Long-term capital gains on transfer of the bonds or GDRs in section 209 | 12.5% |
| 15 | Income of a foreign institutional investor from the securities in section 210(1) | 20%, or the treaty rate if it is lower and the section 159(8) certificate is furnished (Note 2) |
| 17 | Other interest, or any other chargeable sum that is not salary | Rates in force |
Note 2 also covers serial 10. Serial 10's description was not fully set out on the page extract used for this table, so the nature of that row is not restated here. Open section 393 for it.
Treaty rate, Form 41, and a missing PAN
A treaty rate is available when section 159 applies and the payee has furnished what section 159(8) requires. The Form 41 note says that, without a valid electronically filed Form 41 together with the tax residency certificate, the Indian payer deducts at the rate that applies and the income is taxed at Indian rates. Form 41 was Form 10F. The section was section 90(5).
A missing PAN is section 397(2), formerly section 206AA. It is a different question from the rate in this table. That page sets out Rule 217, which switches off one limb of the higher rate for interest, royalty, fees for technical services, dividends and payments on transfer of a capital asset, if the documents in the rule are given.
The country caps that are already on this site are in the DTAA rate lookup. A calculator that starts from payee country, PAN, TRC and gross-up and returns one withholding figure is not on this page.
Tools
- Form 145 part pickerCompany or individual. It applies Rule 220 and says whether Form 146 comes first.
- DTAA rate lookupTreaty caps already tabulated by country. It does not compute section 393 withholding.
- Form 41 / Form 10F generatorThe treaty-information form the vendor files. Form 10F through 31 March 2026, Form 41 after.
Related
- Form 145 and Form 146 for companiesWhich part, when the accountant's certificate comes first, and what the bank is given.
- Gross-up when the contract is net of taxSection 393(10), formerly section 195A, with a worked example.
- Form 129, the payer's applicationAsk the Assessing Officer to fix the taxable sum before you remit. Formerly Form 15E.
Questions
Sources
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
- . Rates limited to figures printed in section 393(2) on this date. Checked against the department note on 26 October 2026.