What rate of TDS does my Indian bank deduct on NRO interest if I live in Spain?

By default your bank deducts 30% under Section 195 — the non-resident rate. With a valid Form 10F and a Tax Residency Certificate from Agencia Tributaria (AEAT), the India-Spain treaty brings that down to 15% on the interest. Anything deducted above the treaty rate before your paperwork was on file can be reclaimed through your Indian return.

Can I get back TDS that was already over-deducted on my NRO account?

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 15% treaty rate, and the excess is refunded with Section 244A interest. Missed prior years can usually be picked up through a condonation request within the CBDT's window.

What paperwork do I need as an NRI in Spain to claim the lower NRO TDS rate?

Two core documents: a Tax Residency Certificate issued by Agencia Tributaria (AEAT), and Form 10F filed on the Indian e-filing portal. Together they tell your bank to apply the India-Spain treaty rate of 15% instead of the 30% default. The TRC has to be renewed each period it covers, otherwise the bank reverts to the full rate.

Spain NRIs · NRO TDS Recovery

NRO account TDS recovery for NRIs in Spain

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

If you live in Spain and hold an NRO fixed deposit or savings account in India, your bank deducts tax at source on the interest at 30% — the default Section 195 rate for a non-resident. The India-Spain tax treaty caps that interest withholding at 15% (Article 12: 15% treaty cap on Indian-source interest), so for most Spanish NRIs the gap between the two is over-withheld tax you are entitled to recover. To claim the lower rate you file Form 10F backed by a Tax Residency Certificate from your country of residence, and any tax already over-deducted comes back as a refund when you file your Indian return.

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India-Spain key facts: nro tds recovery

Default Section 195 rate	30%
India-Spain DTAA treaty rate	15%
Your saving via the treaty	15%
Treaty article / basis	Article 12: 15% treaty cap on Indian-source interest
Your TRC issuing authority	Agencia Tributaria (AEAT)

Rates reflect India's domestic Section 195 withholding and the India-Spain treaty. Surcharge and cess apply on top where relevant.

How it works on the India side

Indian banks apply TDS on NRO interest under Section 195 at the 30% non-resident rate (plus surcharge and cess) unless you have given them a valid Form 10F and Tax Residency Certificate showing you qualify for the treaty rate. Once those are on file, the bank deducts at the lower DTAA rate going forward.

For interest the bank has already over-deducted, the route is your income tax return: the TDS the bank deposited shows in your Form 26AS and AIS against your PAN, you compute your actual liability at the treaty rate, and the difference is refunded with interest under Section 244A. Past years that were missed can often still be recovered through a condonation request, within the window the CBDT allows.

What changes because you live in Spain

Spanish residents are taxed on worldwide income on the IRPF return (Modelo 100), with a foreign tax credit for the Indian tax paid, and must separately declare foreign assets over 50,000 euro on the Modelo 720. High-net-worth residents also face a wealth tax plus the Solidarity Tax on Large Fortunes on an asset base that includes your Indian holdings. One point in your favour: a portfolio share holding below 10% is taxable only in Spain, so India often cannot tax the gain on a small Indian equity or fund position.

Frequently asked questions

Common questions from Spanish NRIs

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DTAA TDS recovery service Spain NRI tax guide — all income types & DTAA rates

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

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