Income type guide
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).
For Gulf NRI on Dividends
Default at-source TDS in India: 20%. Treaty rate (after Form 10F / Form 41 + TRC): 10%. Saving = 10 percentage points.
Article 10
How it works
What happens to your dividends as an NRI
Since the 2020 abolition of DDT, dividends are taxed in the hands of the shareholder. Section 195 governs TDS on dividends paid to non-resident individuals — listed companies deduct 20%. (Section 196D applies specifically to FIIs / FPIs, not individual NRIs.) DTAA Article 10 has a **bifurcated structure** in many treaties: a low rate (5–10%) applies only when the shareholder is a COMPANY holding ≥10% of voting capital; for individuals (the typical NRI case), the rate is higher. By individual treaty rate per CBDT DTAA TDS rate table: **5% (lowest, tied):** Saudi Arabia, Malaysia, Hong Kong. **10%:** UAE, UK (general), Qatar, Kuwait, France, Japan, South Africa, Kenya, Thailand, Germany, Netherlands, Ireland, Switzerland, Sweden, Norway, Indonesia. **12.5%:** Oman. **15%:** Australia, Singapore (individuals; 10% only for companies ≥25% holding), Mauritius (individuals; 5% only for companies ≥10% holding), South Korea (flat), New Zealand. **No DTAA relief at all** (treaty rate ≥ India's 20% domestic): US, Canada, Denmark (individuals — 25% treaty cap exceeds India's 20%, so 20% domestic prevails), Nigeria, Bahrain, Philippines. For the no-relief group, Foreign Tax Credit on the home-country return (Form 1116 in US; T1 lines 40500 / 47900 in Canada) is the only mechanism.
20%
Default TDS rate
Varies
DTAA rate by country
Gulf NRI — what changes for you
Country-specific overlay on Dividends
Indian tax IS your only tax
UAE has no personal income tax on individual savings interest, dividends, or capital gains. So the India-side rate (after DTAA reduction) is the FULL tax bite — no further drag in your country. NRE / FCNR exempt-in-India income flows through tax-free both sides. NRO / dividend income gets reduced via DTAA where treaty caps apply (UAE 12.5% on interest; Saudi 5% on dividends; etc.), and that reduced rate is your only cost.
Dividends rates by country
What each country's treaty says
Sorted by savings potential. 25 countries with a DTAA benefit, 6 with the same rate.
Saudi Arabia
Article 10 — flat 5% on Indian dividends to Saudi residents (no individual-vs-corporate sub-rate). Among the lowest dividend rates in any India DTAA — joint with Malaysia and Hong Kong. (Mauritius's 5% is corporate-only; individuals there are 15%.)
Default → DTAA
20%→5%
Malaysia
Article 10 — 5% on Indian-listed dividends, the lowest dividend rate of any major Indian DTAA alongside Hong Kong
Default → DTAA
20%→5%
Hong Kong
Article 10 — 5% on Indian-listed dividends to HK residents, joint-lowest with Malaysia. The single biggest hook for any Indian listed equity holder in HK.
Default → DTAA
20%→5%
UAE
Article 10
Default → DTAA
20%→10%
UK
Dividends article (post-2013 protocol numbering: Article 11) — 10% general dividend rate for individual UK residents. The 15% sub-rate applies ONLY to dividends paid out of income derived from immovable property by an investment vehicle (REIT-type structures). Per CBDT-published TDS DTAA rate table.
Default → DTAA
20%→10%
Qatar
Article 10
Default → DTAA
20%→10%
Germany
Article 10 — 10% flat rate on Indian-source dividends to resident beneficial owners (no shareholding sub-rate).
Default → DTAA
20%→10%
Netherlands
Article 10 — 10% flat rate on Indian-source dividends to resident beneficial owners (no shareholding sub-rate).
Default → DTAA
20%→10%
Kuwait
Article 10
Default → DTAA
20%→10%
France
Article 11 — 10% on portfolio dividends. The 5% MFN rate that French CAs used to claim under the 1992 protocol is NO LONGER available for India-source dividends after the Indian Supreme Court's October 2023 Nestlé SA ruling — 10% is the correct rate.
Default → DTAA
20%→10%
Ireland
Article 10 — 10% flat rate on Indian-source dividends to resident beneficial owners (no shareholding sub-rate).
Default → DTAA
20%→10%
Switzerland
Article 10 — 10% flat rate on Indian-source dividends to Swiss residents. The MFN-derived 5% rate is no longer self-executing post the Indian Supreme Court's October 2023 Nestlé SA ruling and Switzerland's unilateral suspension of MFN benefit from 1 January 2025; treaty rate is now 10%.
Default → DTAA
20%→10%
Japan
Article 10 — 10% on Indian-listed dividends to Japanese residents
Default → DTAA
20%→10%
South Africa
Article 10
Default → DTAA
20%→10%
Kenya
Article 10
Default → DTAA
20%→10%
Sweden
Article 10 — 10% flat rate on Indian-source dividends to resident beneficial owners (no shareholding sub-rate).
Default → DTAA
20%→10%
Norway
Article 10 — 10% flat rate on Indian-source dividends to resident beneficial owners (no shareholding sub-rate).
Default → DTAA
20%→10%
Thailand
Article 10 — 10% on Indian-listed dividends to Thai residents
Default → DTAA
20%→10%
Indonesia
Article 10 of the 2012 revised India-Indonesia treaty — 10% flat rate on Indian-source dividends to Indonesian residents. The 2012 protocol rationalised dividends, royalties and FTS to a uniform 10% with no shareholding sub-rate.
Default → DTAA
20%→10%
Oman
Article 10 — 12.5% for individual NRIs in all other cases. The 10% sub-rate applies ONLY when the beneficial owner is a company holding ≥10% of the dividend-paying Indian company's shares. Per CBDT-published DTAA TDS rate table.
Default → DTAA
20%→12.5%
Singapore
Article 10 — 15% for individual Singapore residents (the 10% sub-rate applies only when the beneficial owner is a company holding ≥25% of the dividend-paying Indian company's capital). Per CBDT DTAA TDS rate table.
Default → DTAA
20%→15%
Australia
Article 10 — 15% on Indian-listed dividends to Australian residents
Default → DTAA
20%→15%
South Korea
Article 10 (revised 2015 treaty) — 15% on Indian dividends to Korean residents. Flat 15% with no corporate-holding sub-rate.
Default → DTAA
20%→15%
New Zealand
Article 10 — 15% on Indian dividends to NZ residents
Default → DTAA
20%→15%
Mauritius
Article 10 — 15% for individual NRIs (beneficial owner not a company with ≥10% holding). The 5% sub-rate applies only to corporate beneficial owners with ≥10% capital, not individuals.
Default → DTAA
20%→15%
Same rate under DTAA (6 countries)
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