The India side
In India, interest on an NRE account is exempt under Section 10(4) while you hold non-resident status, so India charges nothing and deducts no TDS. NRO interest is taxable, with TDS under Section 195, and Indian dividends are taxable with TDS deducted by the company, both at a domestic rate reducible to the treaty rate if you file a tax residency certificate and Form 10F. So on the Indian side, NRE is untaxed, and NRO interest and dividends are taxed at up to the treaty rate.
France's flat tax, and the social-charges trap
France taxes a resident's investment income under a single flat tax, the prélèvement forfaitaire unique or PFU, of 30%. That 30% is not one tax but two parts bolted together: 12.8% income tax and 17.2% social charges. Both apply to your Indian interest and dividends, because France taxes worldwide income.
The trap is in how the credit for the India tax works. Under the treaty, France gives you a credit for the Indian tax on the dividend or NRO interest, but that credit only reduces the 12.8% income-tax part. The 17.2% social charges are outside the credit entirely, so they stand in full regardless of what India took. So even where India has taxed the income and you get a credit, you still bear the 17.2% social charges on top. On a dividend where India withheld around 10% and France credits it against the 12.8%, the net result is roughly the India tax plus the 17.2% social charges, close to 30% overall. The credit softens the income-tax slice, never the social charges.
The NRE trap, and keeping it aligned
NRE interest is where the surprise is sharpest. It is exempt in India, so it feels tax-free, but a French resident is taxed on worldwide income, so the NRE interest is fully caught by the 30% flat tax in France. And because India levied no tax on it, there is no India tax to credit, so the full French charge stands. The tax-free NRE account is tax-free only in India.
For NRO interest and dividends, the practical move is to cap the Indian tax at the treaty rate with a tax residency certificate and Form 10F, so the credit against the 12.8% is clean and nothing is over-deducted in India. It is worth knowing that a new France-India protocol, signed in 2026 but not yet in force, will change the dividend rates in a few years, but for now the current treaty governs. A practising CA caps the Indian tax, reclaims any excess, and gives your French accountant the India-tax-paid detail for the credit, while flagging that the social charges are a cost the credit cannot reach.