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Philippines NRIs · NRO TDS Recovery

NRO account TDS recovery for NRIs in the Philippines

Your Indian bank deducts tax on NRO interest at the full non-resident rate. The India-Philippines treaty lets you bring it down and reclaim the excess.

If you live in the Philippines and hold an NRO fixed deposit or savings account in India, your bank deducts tax at source on the interest at 30%, the default non-resident rate under Section 393(2) (Section 195 until 31 March 2026). The India-Philippines tax treaty caps that interest withholding at 15% (Article 11), so for most Philippine NRIs the gap between the two is over-withheld tax you're entitled to recover. To claim the lower rate you file Form 41, which replaced Form 10F on 1 April 2026, backed by a Tax Residency Certificate from your country of residence. Anything already over-deducted comes back as a refund when you file your Indian return.
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India-Philippines key facts: nro tds recovery

Default non-resident TDS rate30%
India-Philippines DTAA treaty rate15%
Your saving via the treaty15%
Treaty article / basisArticle 11: 15% for an individual NRI
Your TRC issuing authorityNot 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

Indian banks deduct TDS on NRO interest at the 30% non-resident rate plus surcharge and cess, under Section 393(2) (Section 195 until 31 March 2026). Where India has a treaty with your country that caps interest lower, Form 41 (formerly Form 10F) and a Tax Residency Certificate lodged with the bank get you that capped rate on future interest. Where there is no treaty, there is nothing to claim down to, so the same paperwork changes nothing and the 30% stands.

A lower-deduction certificate is the one piece of paperwork that works at the bank either way. You apply on Form 128 under Section 395 (the old Form 13 under Section 197) through the TRACES portal, and it is open to non-residents on interest. Where your estimated Indian tax for the year is below what the bank is deducting, the Assessing Officer can certify a lower or nil rate, which the bank then applies to future interest.

The refund route is the same either way, and it's your Indian return. The bank's TDS shows against your PAN in Form 26AS and the AIS, you work out what you actually owe (the treaty rate where one applies, otherwise your slab rate, because NRO interest is ordinary slab income), and the excess comes back with interest under Section 244A. Years you never filed can often still be reached: CBDT Circular 11/2024 lets you apply for condonation under Section 119(2)(b) of the 1961 Act, the law that governs the years you're reclaiming, up to five years from the end of that assessment year, though a refund allowed that way carries no Section 244A interest.

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

Your bank deducts 30% under Section 393(2), the non-resident rate. On paper the India-Philippines treaty caps interest at 15%, but claiming it needs a residence certificate and you can't get one. 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. Until then the 30% stands at the bank, and your Indian return is where any over-deduction comes back, because NRO interest is ordinary slab income.

Yes. The over-withheld amount is reclaimed by filing your Indian income tax return: the bank's TDS shows against your PAN in Form 26AS, you compute the tax actually due at the 15% treaty rate, and the excess is refunded with Section 244A interest.

Not the usual pair, and this is where most advice for the Philippines goes wrong. 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. So don't spend months chasing a certificate that won't be issued. What does work is a lower-deduction certificate on Form 128 under Section 395 (the old Form 13 under Section 197) before a large payout, and your Indian return afterwards, where NRO interest is taxed at your slab rate rather than the flat 30% the bank withheld.

Go further

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

DTAA TDS recovery servicePhilippines NRI tax guide: every income type and the rates that apply

NRO TDS Recovery sorted, by an Indian CA who works with Philippine NRIs

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