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South Africa NRIs · NRO TDS Recovery

NRO account TDS recovery for NRIs in South Africa

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

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

Default non-resident TDS rate30%
India-South Africa DTAA treaty rate10%
Your saving via the treaty20%
Treaty article / basisArticle 11
Your TRC issuing authoritySARS (South African Revenue Service)

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

South Africa taxes residents on worldwide income, so this Indian income also lands on your ITR12, with a section 6quat credit for the Indian tax paid. Here's the part that costs Durban families money: SARS credits only foreign tax that is payable with no right of recovery, so any Indian tax withheld above your real Indian liability earns you nothing here. India will refund that excess, but only if you file the Indian return, so skipping it turns a recoverable overpayment into a permanent loss. On the gains side, from 1 March 2025 (the 2026 year of assessment) you can credit the Indian tax on a foreign capital gain up to the South African tax on that gain, where before only 40% of it counted because only 40% of a gain enters your taxable income. Watch the calendar too, because your SARS year ends in February, so one Indian financial year straddles two ITR12s.

Frequently asked questions

Common questions from South African Indians

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 SARS (South African Revenue Service), the India-South Africa 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 SARS (South African Revenue Service), and Form 41, the successor to Form 10F, filed on the Indian e-filing portal. Together they tell your bank to apply the India-South Africa 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 serviceSouth Africa NRI tax guide: every income type and the rates that apply

NRO TDS Recovery sorted, by an Indian CA who works with South African Indians

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