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July 2, 2020

FOR CANADA TAX RESIDENTS

FOR CANADA TAX RESIDENTS:
CONCESSIONAL RATE OF TAX IN INDIA OF 15% ON INTEREST INCOMES UNDER DTAA.

Under Article 11 of the India-Canada 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 Canada. The same shall also be the rate of T.D.S. (withholding tax) in India.

A person is a tax resident of Canada if he stays in Canada for more than 183 days in the calendar year (1st January to 31st December) OR on fulfillment of certain other conditions as per Canadian Law.

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 Canada 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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