Philippines NRIs · Dividend Tax

Dividend tax on Indian shares for NRIs in the Philippines

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

When an Indian company pays you a dividend while you live in the Philippines, 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-Philippines treaty position is nuanced: its lower dividend rate is reserved for substantial corporate shareholdings, so individual investors get no reduction and simply pay the 20% domestic rate (Article 10). The lever that does help is the foreign tax credit on your home-country return.

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India-Philippines key facts: dividend tax

Default non-resident TDS rate	20%
What the treaty changes here	It sets no lower rate on this income. What a treaty decides here is which country gets to tax it.
Treaty article / basis	Article 10: 15% if the beneficial owner is a company holding ≥10% of voting shares, 20% in other cases
Your TRC issuing authority	Not available to you, because the Bureau of Internal Revenue (BIR) doesn't issue one to a resident alien.

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

Here your passport matters more than how long you've lived in Manila. On an Indian passport you're a resident alien, so the Philippines doesn't tax this Indian income at all, and that cuts both ways. BIR stopped issuing Tax Residency Certificates to resident aliens (RMO 51-2019, carried into RMO 43-2020) precisely because you aren't taxed on worldwide income here, so the certificate that unlocks the treaty rate simply isn't available to you. Aliens are also barred from the foreign tax credit citizens get (Section 34(C) of the Tax Code), so there's no fallback in Manila either. Take Filipino citizenship and it flips: worldwide income becomes taxable here, BIR Form 0902 gets you the certificate, and the Indian tax credits against your Philippine bill.

Frequently asked questions

Common questions from Philippine NRIs

India withholds 20% under Section 393(2), plus surcharge and cess. The India-Philippines treaty caps dividends at 20% on paper, but you can't reach it. Under RMO 51-2019 the BIR stopped issuing residence certificates to resident aliens, which on an Indian passport is what you are, so the certificate that unlocks the treaty rate isn't available to you. Take Filipino citizenship and it opens: BIR Form 0902 gets you the certificate and the treaty rate follows. Section 115A also fixes a non-resident's Indian tax on dividends at the withheld rate, so on dividends specifically there is usually no over-deduction sitting there to reclaim later either.

Not through the India-Philippines treaty if you're an individual investor, because its lower rate applies only to substantial corporate holdings, so you stay at the 20% domestic rate. What does help is the foreign tax credit: when you report the dividend on your Philippines return, you claim credit for the Indian tax already deducted, so you aren't taxed twice on the same income.

Go further

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

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

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

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