Oman NRIs · Dividend Tax

Dividend tax on Indian shares for NRIs in Oman

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

When an Indian company pays you a dividend while you live in Oman, 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-Oman treaty position is more favourable, capping the rate at 12.5% for individual residents, a real saving over the 20% default (Article 10). To claim it you need Form 41, the successor to Form 10F, and a Tax Residency Certificate on file with the company or your broker.

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India-Oman key facts: dividend tax

Default non-resident TDS rate	20%
India-Oman DTAA treaty rate	12.5%
Your saving via the treaty	7.5%
Treaty article / basis	Article 10: 12.5% for individual NRIs in all other cases
Your TRC issuing authority	the Oman Tax Authority

Rates reflect India's domestic withholding under Section 393(2) (Section 195 until 31 March 2026) and the India-Oman 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 Oman

Oman charges no personal income tax today, so this Indian income isn't taxed a second time and there's no foreign credit to chase. That ends on 1 January 2028, when Royal Decree 56/2025 brings in a flat 5% and Omani tax residents, expats included, are taxed on worldwide income rather than just what they earn in Oman. The trap is the OMR 42,000 threshold: it's measured on your total annual income, so Indian rent, interest, dividends and what you make selling Indian shares or property all count toward it, and a Muscat package sitting just under the line can be pushed over by the Indian side. Oman's tax year is the calendar year with the return due by 30 June after it, while India's runs April to March, so get your Indian TDS records lined up January to December before 2028, not after.

Frequently asked questions

Common questions from Oman NRIs

India's default is 20% under Section 393(2), but the India-Oman treaty caps it at 12.5% for individual residents, a saving of 7.5%. To get the lower rate you file Form 41 with a Tax Residency Certificate from the Oman Tax Authority. Any excess withheld beforehand is reclaimed on your Indian return.

Yes. With Form 41 and a Tax Residency Certificate on file, the treaty rate of 12.5% applies instead of the 20% default, a 7.5% reduction. Dividends withheld at the higher rate before your paperwork was lodged are reclaimed when you file your Indian return.

Go further

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

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