Last reviewed: 13 August 2026. India's tax treaties routinely cut the tax on an NRI's Indian income — interest on NRO deposits taxed at treaty rates instead of 30%-plus, royalties and fees at 10–15%, and tie-breaker rules when two countries both claim you as resident. But treaty relief in India is paperwork-gated: without a Tax Residency Certificate (TRC) from your country of residence — and, where the TRC is silent on prescribed particulars, an electronically filed Form 10F — the payer must deduct at full domestic rates, and the relief becomes a refund chase instead of a lower deduction. Here is the machinery, current for FY 2026-27.
Where treaties actually save NRIs money
| Income | Domestic default | Typical treaty position* |
|---|---|---|
| NRO deposit interest | 30% + surcharge + cess TDS under section 195 | 10–15% in many major treaties (UAE, USA, UK, Singapore vary by article) |
| Dividends | 20% + cess (domestic NRI rate) | Often 10–15% by treaty article |
| Royalties / fees for technical services | 20% + cess domestic | 10–15% commonly |
| Capital gains, salary, pensions | Domestic computation | Article-specific — some treaties allocate taxing rights entirely; needs case-by-case reading |
*Treaty rates vary by country and article — the exact treaty text governs; the table shows the shape of the saving, not your rate.
The three-document drill
- TRC from your country's tax authority (IRS Form 6166 for the US, HMRC certificate for the UK, FTA certificate for the UAE, IRAS for Singapore) covering the relevant period. Apply early — some authorities take weeks.
- Form 10F on the e-filing portal. It captures the prescribed particulars (status, nationality, tax identification number, period, address) where the TRC does not. Filing is electronic; the acknowledgement goes to the payer. Non-residents without a PAN use the portal's dedicated registration route. Under the renumbered 2026 forms it appears as Form 41 — same substance.
- A declaration of beneficial ownership / no permanent establishment where the payer asks — banks and companies routinely do before applying treaty rates.
Give all three to the deductor — the bank on your NRO account, the tenant, the company paying you — before the payment cycle. The deductor applies the beneficial rate at source, and your money never takes the 30% detour. Miss the timing and the route is the ITR: claim the treaty position in the return (Schedule TR/FSI where foreign-side credit is involved — see our Schedule FA guide for the disclosure side) and recover the excess as a refund.
Residency first — the part people skip
Treaty relief presumes you are actually non-resident (or treaty-resident abroad under the tie-breaker). Check the Indian tests every year: 182 days; the 60-day test with its NRI relaxations; the 120-day rule for Indian citizens with India-sourced income above ₹15 lakh; and deemed residency for high-income citizens untaxed anywhere. Our NRI ITR guide walks the ladder. Dual-resident years are exactly what treaty tie-breakers (permanent home → centre of vital interests → habitual abode → nationality) are for — documented positions, not guesses.
Common mistakes we keep fixing
- Claiming treaty rates in the ITR with no TRC in hand — Section 90(4) makes the claim indefensible.
- TRC for the wrong period (calendar year vs Indian financial year mismatches — cover the Indian FY).
- Assuming Form 10F needs a PAN — the no-PAN portal route exists and works.
- Handing documents to the bank after TDS is deducted, then waiting a year for the refund.
- Forgetting the India-side disclosures that ride along — Schedule FA/FSI/TR consistency wins scrutiny.
Frequently asked questions
Is a TRC compulsory for claiming DTAA benefit?
Yes — section 90(4) of the 1961 Act (carried into the Income-tax Act, 2025) makes a Tax Residency Certificate from your country of residence mandatory for any treaty claim. Where the TRC does not contain the prescribed particulars, an electronically filed Form 10F supplements it.
How is Form 10F filed in 2026?
Electronically on the Indian e-filing portal — manual 10Fs are history. Non-residents without a PAN can register through the portal’s dedicated non-resident route and e-file without obtaining a PAN. Under the Income-tax Rules, 2026 the form is renumbered Form 41, with the same substance.
Can my bank deduct lower TDS on NRO interest using the DTAA?
Yes — hand the bank your TRC, e-filed Form 10F acknowledgement and the declarations it asks for, and it can apply the treaty rate on NRO interest at source instead of the 30%-plus domestic rate. Do it at the start of the financial year and on every renewal of the TRC.
What if TDS was already deducted at 30%?
The treaty position can still be claimed in your income-tax return — compute the income at the treaty rate, disclose the TRC particulars, and claim the excess TDS as a refund. It works, but it parks your money with the department for months; at-source relief is always the better route.
Does claiming DTAA relief affect what I must disclose in India?
The claim rides with disclosures — Schedule TR/FSI where foreign tax credit is involved, and Schedule FA where you are resident and hold foreign assets. Inconsistent treaty claims and disclosures are an easy scrutiny trigger; keep the TRC, 10F and computations in one file.
How does a CA firm set this up end to end?
We determine residency under both domestic law and the treaty, obtain and calendar the TRC renewals, e-file Form 10F, prepare the payer declarations, instruct the bank or tenant on the correct at-source rate, and file the ITR with the treaty computation and disclosures aligned — one consistent record from deduction to assessment.
We set up TRC + Form 10F relief at source, align the ITR and disclosures, and handle the refund where deduction already happened.
NRI Lower TDS Certificate Form 15CA/15CB Certification Talk to usThis article is general information as on 13 August 2026. Treaty rates and articles vary by country and case; the treaty text, the TRC and current CBDT procedure govern. Not professional advice — treaty positions should be documented with advice before adoption.