Nigeria NRIs · Dividend Tax

Dividend tax on Indian shares for NRIs in Nigeria

Indian companies withhold 20% before a dividend reaches you in Nigeria, and no treaty rate exists to cut it. Here's what's actually left to claim.

When an Indian company pays you a dividend while you live in Nigeria, it withholds 20% under Section 393(2) (Section 195 until 31 March 2026), plus surcharge and cess, before the money leaves India. India and Nigeria never signed a tax treaty, so there is no treaty rate to bring anything down to. That makes the Form 41 and Tax Residency Certificate routine brokers ask overseas investors for pointless here: those documents unlock a treaty rate, and there isn't one for Nigerian Indians. Section 115A then fixes a non-resident's Indian tax on dividends at that same 20% of the gross amount with no expenses allowed, so the withholding is usually the final Indian tax rather than an advance you reclaim later. Whether Nigeria credits that Indian tax against its own tax on the same dividend is a question for the local rules there, because no treaty obliges it.

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India-Nigeria key facts: dividend tax

India's default non-resident rate of 20% applies here with nothing to claim it down to.

Section 115A makes the 20% final, so check the surcharge and cess. A residence certificate from the Nigeria Revenue Service (NRS, formerly FIRS) is worth having for the Nigeria side, where your own domestic relief rules are the only thing that can soften the Indian tax.

This is India's domestic withholding under Section 393(2) (Section 195 until 31 March 2026). There is no India-Nigeria treaty to modify it. 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 Nigeria

Nigeria taxes your Indian income and gains too, and on some of it a remittance rule cancels the Nigerian tax. Section 12 of the Nigeria Tax Act 2025, in force since 1 January 2026, makes a resident's income and gains chargeable wherever they arise, even if the cash never leaves your NRO account. The relief runs backwards: section 163 exempts foreign dividend, interest, rent and royalty, but only if you bring it into Nigeria through approved channels. Leave it parked in India and the exemption goes, and section 120 then credits the Indian tax you paid, capped at the Nigerian tax on it. That remittance route never covers gains, so an Indian flat or share sale is chargeable under section 34 wherever the asset sits, and the N150 million threshold only shelters shares in a Nigerian company. Section 51 exempts one dwelling-house once in your life, and a flat you rent out rarely qualifies.

Frequently asked questions

Common questions from Nigerian Indians

20% under Section 393(2), plus surcharge and cess, and no treaty rate is available to Nigerian Indians. Section 115A sets a non-resident's Indian tax on dividends at that same 20% on the gross amount, so unlike NRO interest this is normally the end of the story rather than an over-deduction waiting to be refunded.

Not at the Indian end. There's no treaty rate to claim, so Form 41 won't help and the 20% stands. Check the local rules in Nigeria for a credit against the tax it charges on the same dividend, since no treaty compels one. What is worth checking is whether the company or its registrar withheld more than 20% plus your correct surcharge and cess, which happens and is recoverable on an Indian return.

Go further

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

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

Dividend Tax sorted, by an Indian CA who works with Nigerian Indians

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