China NRIs · Dividend Tax
Dividend tax on Indian shares for NRIs in China
Dividends from Indian companies are withheld at the non-resident rate before they reach you in China — here's the treaty position and how to reclaim any excess.
India-China key facts: dividend tax
| Default Section 195 rate | 20% |
| India-China DTAA treaty rate | 10% |
| Your saving via the treaty | 10% |
| Treaty article / basis | Article 10: flat 10% treaty cap, no shareholding sub-rate |
| Your TRC issuing authority | State Taxation Administration (STA), local tax bureau |
Rates reflect India's domestic Section 195 withholding and the India-China treaty. Surcharge and cess apply on top where relevant.
How it works on the India side
Since the 2020 shift back to classical dividend taxation, dividends from Indian companies are taxable in the shareholder's hands and the company deducts TDS before paying. For a non-resident the default is Section 195 at 20% (plus surcharge and cess). Whether a treaty rate is available depends on the specific treaty — for many countries the lower dividend rate is written only for companies holding a large stake in the Indian payer, which means individual portfolio investors stay at the domestic rate.
Where a lower individual rate does apply, you claim it with Form 10F and a Tax Residency Certificate lodged with the company or broker, and any quarter withheld at the higher rate before your paperwork was on file is reclaimed through your Indian return. Where no lower rate applies, the dividend still goes on your return, and the real relief sits on your home-country side as a foreign tax credit for the Indian tax already paid.
What changes because you live in China
Chinese tax residents are taxed on worldwide income, but only once they cross the six-year residence line for foreigners, so track that count because the year you cross it your Indian portfolio enters the Chinese tax base. A foreign tax credit offsets the Indian tax against the individual income tax on the same income. The recurring chore is the Certificate of Chinese Fiscal Resident: it is valid only for its year of issue, so you re-apply each year to keep claiming the 10% treaty rate at your Indian bank.
Frequently asked questions
Common questions from China NRIs
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Dividend Tax sorted, by an Indian CA who works with China NRIs
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