Income types

DTAA covers more than
just your FD interest.

Every type of Indian income has its own TDS rate, and its own DTAA benefit. Here they all are, with country-by-country breakdowns.

Fixed Deposit Interest TDS

Your bank deducts 30% TDS on NRI FD interest under Section 195. Residents pay 10%. DTAA Article 11 caps the NRI rate by country: **Mauritius 7.5%** (lowest), most Gulf and Continental Europe 10%, UAE 12.5%, US / UK / Singapore / Canada / Australia / Denmark 15%. **Bahrain and Nigeria have no comprehensive DTAA** (only TIEAs) — 30% applies in full, with no recovery via treaty. On a ₹50 lakh FD at 7% (₹3.5 lakh annual interest), the saving ranges from zero (Bahrain, Nigeria) to ₹78,750 (Mauritius), with most NRIs in the ₹52,500–₹70,000 band depending on country.

Default: 30%|Savings: ₹5,000 – ₹60,000/year

Mutual Fund TDS

Sell ₹50 lakh of equity MF gains as an NRI: AMC deducts 12.5% LTCG TDS = ₹6.25 lakh. Under the India-Singapore DTAA's pre-2017 grandfathering, that tax can be zero. Under the US treaty, the FTC offsets it. DTAA on MF gains is the single highest-leverage recovery for most portfolios.

Default: 12.5%|Savings: ₹0 – ₹1,50,000/year

Property Sale TDS

Sell a ₹2 crore flat as NRI: Section 195 makes the buyer deduct 12.5% TDS plus surcharge plus 4% cess on the FULL ₹2 crore (not your gain) — that's 13.0% to 14.95% depending on the sale-value band, roughly ₹26–₹30 lakh blocked for 6–12 months. Form 13 under Section 197, filed 6–8 weeks before registration (30–45 working days AO turnaround), cuts it to your actual tax on the gain.

Default: 12.5%|Savings: ₹2L – ₹60L unblocked per sale

Dividend TDS

Indian companies deduct 20% TDS on every dividend paid to NRIs under Section 195. DTAA Article 10 helps most countries — Saudi / Malaysia / Hong Kong tied at 5% (lowest); UAE / UK / Qatar / Kuwait / France / Japan / Germany / Netherlands / Ireland / Switzerland / Sweden / Norway / Indonesia and several others at 10%; Oman 12.5%; Australia / Singapore (individuals) / Mauritius (individuals) / South Korea / New Zealand at 15%. But six countries' individual NRIs get **ZERO DTAA relief** because the treaty cap matches or exceeds India's 20% domestic: **US, Canada, Denmark, Nigeria, Bahrain, Philippines**. For these, Foreign Tax Credit on the home-country return is the relief mechanism. On a ₹1 lakh annual dividend, savings range from ₹0 (US / Canada / Denmark / Nigeria / Bahrain / Philippines) to ₹15,000 (Saudi / Malaysia / Hong Kong).

Default: 20%|Savings: ₹2,000 – ₹30,000/year

NRO Account Interest TDS

Your NRO savings and FD interest hit 30% TDS, even the small balance your salary lands in each month. DTAA Article 11 drops that to 10–15%. Most NRIs miss that even NRO savings interest qualifies for the treaty rate.

Default: 30%|Savings: ₹1,000 – ₹15,000/year

EPF/NPS Withdrawal TDS

Withdraw ₹25 lakh of EPF before 5 years of service as NRI: 10% TDS under Section 192A = ₹2.5 lakh gone at withdrawal (20% if PAN absent). Time the withdrawal past the 5-year threshold and the principal turns tax-free; the employer contribution portion stays taxable but at slab rate. DTAA adds a further relief on the taxable slice.

Default: 10%|Savings: ₹10,000 – ₹1,00,000 (one-time)

Rental Income TDS

Your tenant deducts 31.2% TDS on gross rent under Section 195, before the 30% standard deduction (Section 24) and municipal tax. On ₹6 lakh/year rent, that's ₹1.87 lakh deducted when your actual tax is closer to ₹75k. The ₹1.1 lakh gap is refundable only via ITR. DTAA doesn't reduce property income TDS under most treaties (Article 6 gives source country primary taxing rights).

Default: 31.2%|Savings: ₹50,000 – ₹2,00,000 refundable via ITR

Bond/NCD Interest TDS

Interest from corporate bonds, NCDs, and government securities faces 30% TDS under Section 195. DTAA Article 11 caps it at 10–15%, same treaty clause that covers FD interest. **Two important carve-outs:** Tax-free PSU bonds (REC / NHAI / IRFC / PFC / HUDCO, issued 2012–2016) are coupon-exempt under Section 10(15)(iv)(h) — zero TDS regardless of country. ECBs and Masala bonds attract Section 194LC's three-tier concessional regime — 5% legacy (borrowings before 1 July 2023), 4% IFSC-listed (issued 1 April 2020 – 30 June 2023), and 9% for IFSC-listed long-term bonds borrowed on or after 1 July 2023; the 5% non-IFSC rate has sunset. On a regular ₹10 lakh NCD coupon, the DTAA gap is ₹1.5 lakh–₹2 lakh a year.

Default: 30%|Savings: ₹0 – ₹2,00,000/year (zero for tax-free PSU bonds; Section 194LC three-tier on ECBs / RDBs / Masala bonds — 5% legacy, 4% IFSC pre-1-July-2023, 9% IFSC post-1-July-2023)

ESOP/RSU Income TDS

ESOPs from an Indian employer vested while you were resident, then exercised after you became NRI: India taxes the perquisite at your **slab rate** (10–45% depending on total income, NOT a flat 30%); your home country (US / UK / Singapore) often taxes the sale gain on the same shares. Without Form 67 FTC, you pay twice. With proper cross-border planning, ESOP/RSU effective tax can drop materially.

Default: 30%|Savings: Highly variable; ₹50k–₹5L+ per year (slab-rate at exercise, capital-gains-rate on sale)

Best DTAA rates