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June 23, 2020

FOR U.K. TAX RESIDENTS

CONCESSIONAL RATE OF TAX IN INDIA OF 10% ON DIVIDEND INCOMES AND 15% ON INTEREST INCOMES UNDER DTAA.

Under Article 11 and Article 12 of the India-UK DTAA (Double Taxation Avoidance Agreement), Notification No. 10/2014 [F.No.505/3/1986-FTD-I], dated 10-2-2014, w.r.e.f. 27-12-2013, there is a concessional rate of 10% on dividend income and 15% on interest income (including NRO bank account interest) respectively, in India for tax residents of U.K. The same shall also be the rate of T.D.S. (withholding tax) in India.

A person is a U.K. tax resident if he stays in U.K. for more than 183 days in the U.K. tax year (6th April to 5th April) OR if his only home was in the U.K. where he has spent at least 30 days there in the tax year along with at least 91 days in U.K.

The above rates are inclusive of surcharges and cess which is affirmed by the following judicial decisions:

  1. Deputy Director of Income-tax (IT)-1(1), Kolkata v. BOC Group Ltd.
  2. R.A.K. Ceramics, UAE v. Deputy Commissioner of Income Tax, International Taxation (2), Hyderabad

Kindly contact us in case of any clarification.

Ashutosh NRI services (A division of Ashutosh Financial Services Pvt. Ltd.)

Contact us: +91 70435 93388 / nris2@ashutoshfinserv.com

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Disclaimer: The above facts are based on our interpretation of law. The same should not be relied or acted upon without seeking specific professional advice.

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