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Saudi Arabia NRIs · NRO TDS Recovery

NRO account TDS recovery for NRIs in Saudi Arabia

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

If you live in Saudi Arabia 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-Saudi Arabia tax treaty caps that interest withholding at 10% (Article 11), so for most Saudi 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-Saudi Arabia key facts: nro tds recovery

Default non-resident TDS rate30%
India-Saudi Arabia DTAA treaty rate10%
Your saving via the treaty20%
Treaty article / basisArticle 11
Your TRC issuing authorityZATCA (Zakat, Tax and Customs Authority)

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

Nothing you earn in India is taxed again in the Kingdom. Saudi Arabia charges individuals no personal income tax and no inheritance or gift tax, and Zakat reaches Saudi and GCC nationals rather than you, so the Indian rate above is the entire cost. Plan the paperwork early, because that's where this corridor actually goes wrong. A residence certificate from ZATCA needs your iqama, an employer letter and proof of 183 days, and it realistically takes three to six weeks, not the few days Gulf blogs promise. In practice only the Riyadh and Dammam regional offices process expat applications reliably. Start it a clear quarter before the Indian filing or payout it has to support.

Frequently asked questions

Common questions from Saudi NRIs

By default your bank deducts 30% under Section 393(2), the non-resident rate. With a valid Form 41 and a Tax Residency Certificate from ZATCA (Zakat, Tax and Customs Authority), the India-Saudi Arabia treaty brings that down to 10% on the interest. Anything deducted above the treaty rate before your paperwork was on file can be reclaimed through your Indian return.

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 10% treaty rate, and the excess is refunded with Section 244A interest.

Two documents: a Tax Residency Certificate issued by ZATCA (Zakat, Tax and Customs Authority), and Form 41, the successor to Form 10F, filed on the Indian e-filing portal. Together they tell your bank to apply the India-Saudi Arabia treaty rate of 10% instead of the 30% default. The TRC has to be renewed for each period it covers, otherwise the bank reverts to the full rate.

Go further

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

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

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

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