Remit the income to Singapore, or the treaty rate can be cut back
Article 24 of the India-Singapore treaty, the Limitation of Relief, can cut your treaty rate back to the income you actually bring to Singapore. It says that where the treaty exempts your Indian income or taxes it at a reduced rate, and Singapore taxes that income only by reference to the amount "remitted to or received in" Singapore, India's relief applies only to the part you actually remit or receive there. In other words, the reduced rate follows the money to Singapore.
This matters because of how Singapore taxes an individual. Singapore is territorial: a resident is taxed on foreign income only when it is received in Singapore, and that received income is then exempt. Because the charge runs off receipt, the Revenue can argue the Article 24 condition is met, and it has invoked the clause. There is a fair counter-argument that a resident individual's foreign income is exempt in Singapore whether or not it is remitted, so the clause may not bite, but the point is unsettled. The safe course is clear: if you claim the 15 per cent treaty rate on your Indian dividends or NRO interest and leave the money in your Indian account, you give the officer room to invoke Article 24 and restore the full domestic rate, around 20 per cent on dividends and 30 per cent on interest, on the part you never brought to Singapore.
The fix is not complicated. Remit the income to your Singapore bank in the same financial year and keep the remittance advice. Then the treaty rate stands on the whole amount, and there is nothing for Article 24 to cut.
When the remittance rule bites, and when it does not
Article 24 does not catch everything, and knowing the line saves you from over-worrying. It bites on the reduced-rate items you might leave in India: NRO interest, where the treaty gives 15 per cent, or 10 per cent to a bank, against about 30 per cent at home, and dividends, where it gives 15 per cent against about 20 per cent. Those are the amounts to remit.
It does not reach income India has no right to tax in the first place. Where the treaty gives the taxing right to Singapore alone, there is no Indian rate to reduce, so Article 24 has nothing to limit, and it applies whether or not you remit. Tribunals in cases like Citicorp Investment Bank and APL have confirmed this. That covers your Indian mutual fund unit gains, which fall under the residual clause Article 13(5), and gains on company shares you bought before 1 April 2017, grandfathered under Article 13(4A). It also does not apply where Singapore taxes the income on an accrual basis rather than on receipt.
| Indian income | Relief you claim | Remit to be safe? |
|---|---|---|
| NRO interest | 15 per cent, 10 per cent to a bank | Yes |
| Dividends | 15 per cent | Yes |
| Mutual fund unit gains | Taxable only in Singapore, Article 13(5) | No, India cannot tax it |
| Pre-2017 share gains | Taxable only in Singapore, Article 13(4A) | No |
A worked example
Arjun is a Singapore tax resident and receives Indian dividends of Rs 8,00,000 in the year. He gives the company's registrar his Singapore Tax Residency Certificate and Form 41, formerly Form 10F, and claims the treaty rate, so TDS comes off at 15 per cent, Rs 1,20,000, instead of the roughly 20 per cent, Rs 1,60,000, that domestic law would take. So far so good.
Then he leaves the whole dividend in his NRO account. At assessment, the officer notes that none of it was remitted to or received in Singapore, invokes Article 24, and restores the full domestic rate on the unremitted dividend, adding back about Rs 40,000 plus interest. Had Arjun simply transferred the dividend to his Singapore bank in the same year and kept the remittance advice, the 15 per cent rate would have held on the entire amount. His Indian mutual fund gains that year were untouched either way, because India had no right to tax them at all.
The other clause to know: Limitation of Benefits (Article 24A)
Article 24 is about remittance. A second clause, Article 24A, the Limitation of Benefits rule, decides who can claim the share capital gains benefits at all. It targets shell and conduit companies. A Singapore entity is treated as a shell if its annual spending on real operations in Singapore is below SGD 200,000, or about Rs 50 lakh in India, for each of the two years before the gain, while a listed company, or one that spends more, is safe. A shell company loses the grandfathered-share benefit under Article 13(4A).
This is aimed at holding companies routed through Singapore, not at a genuine resident individual selling their own shares, so it rarely troubles a real NRI. But two things still matter for you. Newer treaty benefits also face the principal purpose test brought in by the multilateral instrument, though the tax department confirmed in January 2025 that grandfathered pre-2017 gains sit outside that test. And a Tax Residency Certificate with Form 41, formerly Form 10F, is necessary but not always enough on its own, because the department increasingly looks for genuine residence and substance behind the certificate. A practising CA makes sure the claim is clean before you rely on it.