Spain NRIs · Dividend Tax

Dividend tax on Indian shares for NRIs in Spain

Dividends from Indian companies are withheld at the non-resident rate before they reach you in Spain. Here's the treaty position and how to reclaim any excess.

When an Indian company pays you a dividend while you live in Spain, the company withholds tax at source before the money reaches you. India's default withholding on non-resident dividends is 20% under Section 393(2), the successor to Section 195. The India-Spain treaty position is more favourable, capping the rate at 15% for individual residents, a real saving over the 20% default (Article 11). To claim it you need Form 41, the successor to Form 10F, and a Tax Residency Certificate on file with the company or your broker.

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India-Spain key facts: dividend tax

Default non-resident TDS rate	20%
India-Spain DTAA treaty rate	15%
Your saving via the treaty	5%
Treaty article / basis	Article 11: flat 15% treaty cap on Indian-source dividends, better than the 20% domestic rate
Your TRC issuing authority	the Agencia Tributaria (AEAT)

Rates reflect India's domestic withholding under Section 393(2) (Section 195 until 31 March 2026) and the India-Spain treaty. Surcharge and cess apply on top where relevant.

How it works on the India side

Since the 2020 shift back to classical dividend taxation, dividends from Indian companies are taxable in the shareholder's hands and the company deducts TDS before paying. For a non-resident the default is 20% under Section 393(2) (Section 195 until 31 March 2026), plus surcharge and cess, and Section 115A taxes those dividends at 20% of the gross amount with no expenses allowed. A lower rate only ever comes from a treaty, and only where that treaty writes one for individuals: several of India's treaties reserve the reduced dividend rate for companies holding a large stake in the Indian payer, and some countries have no treaty with India at all, so portfolio investors there stay at the domestic rate.

Where a lower individual rate does apply, you claim it with Form 41 (formerly Form 10F) and a Tax Residency Certificate lodged with the company or broker, and any dividend withheld at the higher rate before your paperwork was on file is reclaimed through your Indian return. Where no lower rate applies, the 20% is generally your final Indian tax, so the questions worth asking are whether the payer withheld more than the correct rate and surcharge, and whether the country you live in gives you a credit for that Indian tax.

What changes because you live in Spain

Elect Spain's Beckham regime and you quietly lose the India treaty rate. Under article 93 LIRPF you stay a Spanish resident but you're taxed like a non-resident for the year you move plus the five after it, so your Indian interest, dividends, rent, share gains and property gains stay outside the Spanish net. That's exactly why AEAT's own manual says people on this option aren't residents for the purposes of a double tax convention. You can still ask for a Spanish residence certificate, but you only get the plain anexo 9 model under Orden HAC/3626/2003, never the anexo 10 treaty version, and that's the one India wants before it will apply the treaty rate. Nothing on the Spanish side softens the hit either, because the credit this regime allows covers foreign employment and business income only and stops at 30% of the Spanish tax on it. Only an Indian refund claim gets it back.

Frequently asked questions

Common questions from Spanish NRIs

India's default is 20% under Section 393(2), but the India-Spain treaty caps it at 15% for individual residents, a saving of 5%. To get the lower rate you file Form 41 with a Tax Residency Certificate from the Agencia Tributaria (AEAT). Any excess withheld beforehand is reclaimed on your Indian return.

Yes. With Form 41 and a Tax Residency Certificate on file, the treaty rate of 15% applies instead of the 20% default, a 5% reduction. Dividends withheld at the higher rate before your paperwork was lodged are reclaimed when you file your Indian return.

Go further

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

NRI ITR for interest, rent and dividend income Spain NRI tax guide: every income type and the rates that apply

Dividend Tax sorted, by an Indian CA who works with Spanish NRIs

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