Tanzania NRIs · Dividend Tax

Dividend tax on Indian shares for NRIs in Tanzania

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

When an Indian company pays you a dividend while you live in Tanzania, 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-Tanzania treaty position is more favourable, capping the rate at 10% for individual residents, a real saving over the 20% default (Article 10). 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-Tanzania key facts: dividend tax

Default non-resident TDS rate	20%
India-Tanzania DTAA treaty rate	10%
Your saving via the treaty	10%
Treaty article / basis	Article 10: 10% general treaty cap (5% only for a company holding at least 10%)
Your TRC issuing authority	the Tanzania Revenue Authority (TRA)

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

Your credit for the Indian tax gets valued at your average Tanzanian rate, not at the rate that income actually bears. Section 77(2) of the Income Tax Act limits the foreign tax credit to your average rate of Tanzanian income tax for the year, applied to your taxable foreign income, and since your first TZS 3,240,000 a year is taxed at nil, that average comes out under the band your Indian interest, rent or gain really sits in. So part of what India took goes unrelieved. It isn't gone for good: section 77(3) carries it into a later year as unrelieved foreign income tax, and section 77(4) is the only way to deduct the Indian tax instead of crediting it, since no other deduction for it is allowed. All of this turns on a door people walk through without noticing: section 66(1)(a) makes you resident for the whole year if you keep a home in Tanzania and set foot here even once.

Frequently asked questions

Common questions from Tanzania NRIs

India's default is 20% under Section 393(2), but the India-Tanzania treaty caps it at 10% for individual residents, a saving of 10%. To get the lower rate you file Form 41 with a Tax Residency Certificate from the Tanzania Revenue Authority (TRA). 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 10% applies instead of the 20% default, a 10% 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

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

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