Denmark NRIs · Dividend Tax

Dividend tax on Indian shares for NRIs in Denmark

Dividends from Indian companies are withheld at the non-resident rate before they reach you in Denmark. Here's the treaty position and how to reclaim any excess.

When an Indian company pays you a dividend while you live in Denmark, the company withholds tax at source before the money reaches you. India's default withholding on non-resident dividends is 20% under Section 393(2), the successor to Section 195. The India-Denmark treaty position is nuanced: its lower dividend rate is reserved for substantial corporate shareholdings, so individual investors get no reduction and simply pay the 20% domestic rate (Article 11(2)). The lever that does help is the foreign tax credit on your home-country return.

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India-Denmark key facts: dividend tax

Default non-resident TDS rate	20%
What the treaty changes here	It sets no lower rate on this income. What a treaty decides here is which country gets to tax it.
Treaty article / basis	Article 11(2), individuals get no treaty relief on Indian dividends
Your TRC issuing authority	Skattestyrelsen

Rates reflect India's domestic withholding under Section 393(2) (Section 195 until 31 March 2026) and the India-Denmark 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 20% under Section 393(2) (Section 195 until 31 March 2026), plus surcharge and cess, and Section 115A taxes those dividends at 20% of the gross amount with no expenses allowed. A lower rate only ever comes from a treaty, and only where that treaty writes one for individuals: several of India's treaties reserve the reduced dividend rate for companies holding a large stake in the Indian payer, and some countries have no treaty with India at all, so portfolio investors there stay at the domestic rate.

Where a lower individual rate does apply, you claim it with Form 41 (formerly Form 10F) and a Tax Residency Certificate lodged with the company or broker, and any dividend withheld at the higher rate before your paperwork was on file is reclaimed through your Indian return. Where no lower rate applies, the 20% is generally your final Indian tax, so the questions worth asking are whether the payer withheld more than the correct rate and surcharge, and whether the country you live in gives you a credit for that Indian tax.

What changes because you live in Denmark

Denmark taxes residents on worldwide income, and Skattestyrelsen credits your Indian tax only up to the Danish tax on that same slice (ligningsloven 33). If any of it is mutual fund units, watch the timing: an open-ended fund that buys back units at NAV counts as an investeringsselskab, so Denmark taxes the NAV rise every year under lagerprincippet, unrealised gains included, while India taxes you only when you redeem. Denmark gives the credit in the year the income was earned, not the year you paid the Indian tax, so you have to get those older years reopened, and ordinary genoptagelse shuts on 1 May in the fourth year after the income year (skatteforvaltningsloven 26). Keep a flat in India for your own use and there is a second one: ejendomsværdiskat applies to homes outside Denmark too, and you work out and report the market value yourself.

Frequently asked questions

Common questions from Danish NRIs

India withholds 20% under Section 393(2). For Danish NRIs, the India-Denmark treaty's lower dividend rate is written for companies holding a large stake in the Indian payer, so individual investors get no reduction and pay the 20% domestic rate. The real relief is the foreign tax credit you claim on your Denmark return for that Indian tax.

Not through the India-Denmark treaty if you're an individual investor, because its lower rate applies only to substantial corporate holdings, so you stay at the 20% domestic rate. What does help is the foreign tax credit: when you report the dividend on your Denmark return, you claim credit for the Indian tax already deducted, so you aren't taxed twice on the same income.

Go further

Read the full guide, or see your country's complete picture

NRI ITR for interest, rent and dividend income Denmark NRI tax guide: every income type and the rates that apply

Dividend Tax sorted, by an Indian CA who works with Danish NRIs

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