Tax Rates as per DTAAs and Income Tax Act

Non-residents can compute their tax liability as per the tax rates prescribed under the Income-tax Act

or

the rates prescribed under the DTAAs (Double Taxation Avoidance Agreements), whichever is more beneficial.

Dividend Income other than dividends covered u/s 115-O

Tax Rates applicable on dividend Income (other than dividend covered under Section 115-O) as per Income Tax Act

1. Rate of tax shall be 10% on income from Global Depository Receipts under Section 115AC(1)(b) of Income-tax Act, 1961 (other than dividends referred to in section 115-O).
2. Rate of tax shall be 20% under Section 115A on dividend (other than dividends referred to in section 115-O) received by a foreign company or a non-resident non-corporate assessee
3. Rate of tax shall be 20% under Section 115AD on dividend (other than dividends referred to in section 115-O) received by a Foreign institutional investor.
4. From Assessment Year 2017-18, dividend in excess of ₹ 10 lakh shall be chargeable to tax in the case of an individual, Hindu undivided family (HUF) or a firm who is resident in India, at the rate of 10% as per section 115BBDA.
5. From Assessment Year 2018-19, dividend in excess of ₹ 10 lakh shall be chargeable to tax in the case of person who is resident in India other than:
   1. a domestic company; or
   2. a fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in section 10(23C)(iv)/(v)/(vi)/(via); or
   3. a trust or institution registered under section 12AA.

at the rate of 10% as per section 115BBDA.

Tax Rates applicable on dividend Income (other than dividends covered u/s 115-O) as per DTTAs

Interest

Tax Rates applicable on Interest Income as per Income Tax Act

1. Rate of tax shall be 20% under Section 115A on interest received by a foreign company or a non-resident non-corporate assessee from Government or an Indian concern on moneys borrowed or debt incurred by Government or the in Indian concern in foreign currency.
2. Rate of tax shall be 10% under Section 115AC on income from bonds of an Indian company issued in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf, or on bonds of a public sector company sold by the Government, and purchased by non-resident in foreign currency
3. Rate of tax shall be 5% in following cases:
   1. Interest received from an infrastructure debt fund as referred to in section 10(47)
   2. Interest received from an Indian company specified in section 194LC.
   3. Interest of the nature and extent referred to in section 194LD (applicable from the assessment year 2014-15).
   4. Distributed income being interest referred to in section 194LBA(2) (section 194LBA is inserted by the Finance (No. 2) Act, 2014 w.e.f. 01-10-2014)

Tax Rates applicable on Interest Income as DTAAs

Royalty

Tax Rates applicable on Royalty Income as per Income Tax Act

From Assessment Year 2016-17, Royalty and fees for technical service received by a foreign company or a non-resident non-corporate assessee from government or an Indian concern shall be taxed at the rate of 10% if agreement is made at any time after 31 March 1976.

From Assessment Year 2017-18, any income of a person resident in India by way of royalty in respect of a patent developed and registered in India shall be taxable at the rate of 10% as per section 115BBF.

Tax Rates applicable on Royalty Income as DTAAs

Fee for Technical Services

Tax Rates applicable on Income from Fee for Technical Services as per Income Tax Act

From Assessment Year 2016-17, Royalty and fees for technical service received by a foreign company or a non-resident non-corporate assessee from government or an Indian concern shall be taxed at the rate of 10% if agreement is made at any time after 31 March 1976.

From Assessment Year 2017-18, any income of a person resident in India by way of royalty in respect of a patent developed and registered in India shall be taxable at the rate of 10% as per section 115BBF.

Tax Rates applicable on Income from Fee for Technical Services as DTAAs

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