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June 23, 2020

FOR U.S.A. TAX RESIDENTS

FOR U.S.A. TAX RESIDENTS

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

PASS THIS MESSAGE TO ALL YOUR FRIENDS AND RELATIVES IN U.S.A.

Under Article 11 of the India-U.S.A. DTAA (Double Taxation Avoidance Agreement), there is a concessional rate of 15% on interest incomes (including NRO bank account interest) in India for tax residents of U.S.A. The same shall also be the rate of T.D.S. (withholding tax) in India.

A person is a tax resident of U.S.A. if he stays in U.S.A. for more than 183 days in the calendar year (1st January to 31st December) OR on fulfilment of certain other conditions such as being a U.S.A. citizen or U.S.A. green card holder.

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

It has come to our notice that several NRIs based in U.S.A. are unaware of this concession.

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

www.ashutoshfinserv.com

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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