What do you need help with?
Choose the step that matches your problem. Reducing future deductions and checking tax already deducted need different follow-up.
I want to reduce TDS on future interest. Ask your bank, in advance, what it needs to consider treaty relief on future interest. Start with the treaty-paperwork guide.
Tax has already been deducted. Check your interest and tax-deduction records against the tax due for that year. A refund claim is for any eligible excess, not automatically all the tax withheld. See help with an Indian tax return.
My bank rejected the paperwork. Ask for the rejection reason in writing. For a treaty-relief request, check the year and documents in the treaty-paperwork guide. If the rejection is about transferring money abroad, use the separate remittance paperwork checklist.
Not sure which route fits? Ask a CA to review your NRO TDS issue. Start with the issue and tax year. Do not put account numbers, tax IDs or documents in your opening message.
How much TDS is deducted on an NRO account, and what it should be
NRO interest can attract withholding at the default non-resident rate unless an applicable lower treatment is established. TDS is not a penalty and may differ from your final tax.
Treaty relief depends on the applicable treaty and your eligibility. The table shows selected headline interest rates, not an unconditional entitlement.
| Where you live | Your treaty rate on interest |
|---|---|
| UAE | 12.5% |
| US, UK, Singapore | 15% |
| Saudi Arabia, Qatar, Netherlands, Germany, France | 10% |
A rate difference is not a guaranteed refund. Check treaty eligibility, your total tax liability and the tax credit available for the relevant year before calculating any excess.
How to avoid TDS on an NRO account: four routes to cut or recover it
NRO interest is taxable income, but the final tax depends on your circumstances. Withholding can exceed the tax you ultimately owe. These are the routes, and the one that fits depends on your country and your total Indian income.
| Route | What you do | When it fits |
|---|---|---|
| Treaty rate at source | Give the bank's NRI desk a current TRC and Form 41 (formerly Form 10F) before the interest is credited | You live in a treaty country and the bank will accept it |
| Lower or nil TDS certificate | Apply to the tax department: Section 197 and Form 13 for payments up to 31 March 2026, Section 395 and Form 128 from 1 April 2026 | Your actual tax on Indian income is below even the treaty rate, for example because your total Indian income is small |
| Reclaim through your return | File the return appropriate to your income, calculate the tax due, and claim the excess as a refund (refund interest is subject to filing-date rules and statutory conditions) | Tax was already cut above what you actually owe, or the bank would not apply your treaty rate |
| Keep foreign earnings in NRE or FCNR | Use an eligible NRE or FCNR account where the applicable exemption conditions are met | New savings from abroad. For money already in NRO, ask the bank to confirm the permitted transfer route, tax compliance and applicable remittance documents |
What does not work: Form 15G and Form 15H. Non-residents cannot file either, so a bank will refuse them on an NRO account. We explain why, and what to do instead, in NRIs and Form 15G/15H.
To see the TDS on your own deposit before you pick a route, use the NRO and FD TDS calculator.
How to fix it: two forms and a return
Check the relevant tax year, treaty eligibility and tax-deduction records before claiming a refund.
Treaty documents. Obtain a TRC covering the relevant period and use the applicable treaty declaration: Form 10F for old-law years, Form 41 under the new law. Filing documents alone does not establish entitlement to every treaty benefit.
Your Indian return. Reconcile the interest and tax credit, calculate your liability, and claim any eligible excess. Use the return form appropriate to your income; this is not always ITR-2. Refund processing and any queries affect when an approved amount is paid.
Interest on an eligible refund. For eligible excess-TDS refunds, interest is generally 0.5% for each month or part of a month. It normally starts on 1 April after the income year for an on-time return, or on the filing date for a late return, and runs to the refund grant date. Section 244A applies to old-law years; Section 437 applies under the Income-tax Act 2025. The refund-size threshold, taxpayer-caused delays and other statutory exclusions can reduce or eliminate interest.
See the official old-law refund-interest provision and current Act, Section 437.
Missed past years? You can still claim
Most NRIs don't run this for the first few years. They see the 30%, assume that's just how it works, and let it go. The good news: you can go back and claim.
Under Section 119(2)(b), the tax department can allow a late refund claim for genuine hardship. CBDT Circular 11/2024 sets the limit: a request generally must be filed within five years from the end of the assessment year, and an NRI's treaty refund is a refund claim like any other.
The steps: file a condonation request (which asks permission to file the late returns), wait for the decision, then file the return for each approved year with your TRC and Form 10F for that year. An approved late-filing request still requires the return and refund claim to be processed. CBDT Circular 11/2024 excludes interest on belated refund claims covered by it.
When NRE and FCNR interest is exempt
NRE interest is exempt in India when the individual meets the FEMA non-resident or RBI-permission condition and the account is maintained under the applicable rules. FCNR interest has separate conditions: a foreign-currency deposit with a scheduled bank whose acceptance of the deposit is approved by RBI, held by a non-resident or an eligible resident but not ordinarily resident. Moving money between accounts does not erase tax already due on NRO interest.
The current Act, Schedule IV sets the eligibility conditions. Ask the bank to confirm that the account and proposed funding route are permitted before transferring money.