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

By default your bank deducts 30% under Section 195 — the non-resident rate. With a valid Form 10F and a Tax Residency Certificate from Internal Revenue Service (IRS), the India-US 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 US to claim the lower NRO TDS rate?

Two core documents: a Tax Residency Certificate issued by Internal Revenue Service (IRS), and Form 10F filed on the Indian e-filing portal. Together they tell your bank to apply the India-US 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.

US NRIs · NRO TDS Recovery

NRO account TDS recovery for NRIs in US

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

If you live in United States of America 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-US tax treaty caps that interest withholding at 15% (Article 11, caps Indian interest withholding at 15% for US-resident beneficial owners), so for most American 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-US key facts: nro tds recovery

Default Section 195 rate	30%
India-US DTAA treaty rate	15%
Your saving via the treaty	15%
Treaty article / basis	Article 11, caps Indian interest withholding at 15% for US-resident beneficial owners
Your TRC issuing authority	Internal Revenue Service (IRS)

Rates reflect India's domestic Section 195 withholding and the India-US 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 United States of America

US residents are taxed on worldwide income, so this Indian income also lands on your IRS Form 1040 — with a foreign tax credit (Form 1116) for the Indian tax paid. On top of that you report your Indian accounts and assets on the FBAR (FinCEN 114) and Form 8938 once the thresholds are crossed, and Indian mutual funds can trigger punitive PFIC treatment. The India-side tax here is only half the picture.

Frequently asked questions

Common questions from American NRIs

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

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

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