Tag: DTAA

How to Claim Foreign Tax Credit in India — Form 44 (Form 67) Guide for NRIs 2026
If you are an NRI who has returned to India and is now a resident, or if you are an RNOR earning income both in India and abroad, you may be paying tax in two countries on the same income. The solution is the Foreign Tax Credit (FTC) — a mechanism under India’s Double Tax Avoidance Agreements (DTAA) that allows you to offset taxes paid abroad against your Indian tax liability. Under the Income Tax Act 2025, this is claimed via Form 44 (previously Form 67).

Who Can Claim Foreign Tax Credit?

Foreign Tax Credit under Sections 90/91 of the Income Tax Act 2025 is available to:
- Resident Indians (ROR) who earn foreign income — salary, business income, capital gains, interest — that is also taxable in India
- RNOR (Resident but Not Ordinarily Resident) individuals in their transition years after returning from abroad
- Individuals from countries with which India has a DTAA — USA, UK, UAE, Canada, Australia, Singapore, Germany, and 90+ other countries
- Individuals from countries without DTAA who have paid tax there — FTC is available under Section 91 of the IT Act 2025 as unilateral relief
What Changed: Form 67 Is Now Form 44

Under the Income Tax Act 2025 (effective 1 April 2026), Form 67 has been renumbered as Form 44. The underlying process and purpose remain identical — you file a statement of foreign income and foreign taxes paid, and claim the credit against your Indian tax payable. If you search for “Form 67” online, it is the same as Form 44 under the new Act.

At NRI Tax CA, we handle Form 44 / Form 67 filing as an add-on to ITR filing at ₹1,499 (ITR filing starts at ₹3,499).

The Critical Deadline You Must Not Miss

This is the most common and costly mistake: Form 44 must be filed on or before the due date of your ITR. If you file your ITR first and then try to file Form 44 later, your FTC claim will be rejected. The Income Tax Department has been strict about this sequencing, and courts have consistently held that late Form 44 filings do not qualify for the credit.

For most individuals, the ITR due date is 31 July of the assessment year. For those with audit requirements, it is 31 October. File Form 44 before or on the same day as your ITR — not after.

What Information You Need to File Form 44

To file Form 44, you need the following documents from your foreign country of employment or residence:
- Foreign tax return or assessment order showing the income declared and tax assessed
- Proof of tax payment — tax paid certificate, withholding tax certificate, or bank statement showing tax deducted
- Nature of income — salary, capital gains, business income, interest, etc.
- DTAA Article under which the credit is being claimed
- Exchange rate on the date of tax payment for conversion to INR
You do not need to provide foreign documents to us directly — we will tell you exactly what to gather based on your specific country and income type.

How the Credit Is Calculated

The FTC you can claim is the lower of: (a) the foreign tax actually paid, or (b) the Indian tax payable on that same income. This prevents a situation where you claim more credit than your Indian tax liability on that income. The calculation is done income-category by income-category — foreign salary credit, foreign capital gains credit, etc. are computed separately.

For example: If you earned ₹10 lakhs in salary from your US employer and paid ₹2.5 lakhs in US federal tax on it, and your Indian tax on the same ₹10 lakhs is ₹1.8 lakhs — your FTC is limited to ₹1.8 lakhs (the lower amount). The excess US tax paid (₹70,000) is not refundable but may be carried forward under US tax rules.

Countries Where This Is Most Commonly Used

Foreign Tax Credit claims are most common for NRIs returning from the United States, United Kingdom, Canada, Australia, Germany, and Singapore. The US in particular has a global taxation system — meaning US citizens and green card holders pay US tax on worldwide income regardless of where they live. When such individuals also become Indian tax residents, Form 44 / Form 67 is essential to avoid double taxation.

NRI Status and RNOR — The Transition Window

When you return to India after being an NRI, you typically get a 2–3 year window as an RNOR (Resident but Not Ordinarily Resident). During RNOR status, your foreign income is not taxable in India — only Indian-sourced income is. This makes RNOR status extremely valuable, and careful planning of your return date can determine whether you get this benefit for 2 years or just 1.

Once RNOR status ends and you become a full Resident (ROR), your global income is taxable in India and FTC via Form 44 becomes essential if you still have foreign income. At NRI Tax CA, our NRI Status & Residential Advisory service (₹4,999) analyses your exact situation and advises on optimal transition timing.

Get Your Form 44 Filed Correctly

Foreign Tax Credit calculations involve DTAA interpretation, income-category matching, and precise timing requirements. An error here means either overpaying Indian tax (by not claiming enough credit) or a notice from the Income Tax Department (by claiming incorrectly). At NRI Tax CA, we handle Form 44 as part of your NRI ITR filing — ensuring the credit is maximised legally and filed on time.

Compute your foreign tax credit and net India tax liability with our free NRI tax calculator. For Form 67 filing and DTAA claim in ITR, consult our NRI tax experts.

Start your case here — fixed quote within 2 hours, ITR + Form 44 starting at ₹4,998.
April 25, 2026
NRI Tax in India 2026 — Complete Guide | Slabs, DTAA & ITR

If you are a Non-Resident Indian, understanding your tax obligations in India is not optional — it is essential. Many NRIs either overpay tax due to missed deductions, or unknowingly become non-compliant by not filing returns. This complete guide covers everything you need to know about NRI taxation in India for AY 2025-26.

Who is an NRI for Tax Purposes?

Your residential status under the Income Tax Act determines what income is taxable in India. An individual is treated as a Non-Resident Indian (NRI) for a financial year if they meet either of these conditions:

They were outside India for 182 days or more during that financial year, or they were outside India for 365 days or more during the four preceding financial years and stayed in India for less than 60 days in the current year.

This determination is made fresh every financial year. Your passport, visa status, or country of residence does not automatically make you an NRI — the day count is what matters under Indian tax law.

There is also a third status called Resident but Not Ordinarily Resident (RNOR), which applies to NRIs who have recently returned to India. RNOR status offers partial tax benefits for up to two years after return and requires careful planning.

What Income is Taxable in India for NRIs?

As an NRI, only income that accrues or arises in India, or is received in India, is taxable here. Your foreign income — salary earned abroad, bank interest in foreign accounts, rental income from foreign property — is not taxable in India at all.

Income that is taxable in India for NRIs includes:

Salary income — if the services are rendered in India, the salary is taxable in India regardless of where it is paid or received.

Rental income from Indian property — any property situated in India that generates rent is taxable in India. The fact that you receive the rent in a foreign account makes no difference.

Interest income from Indian bank accounts — interest earned on NRO accounts is fully taxable in India at applicable rates with TDS deducted at source. Interest on NRE and FCNR accounts is completely exempt from Indian tax.

Capital gains from Indian assets — profits from selling property, shares, mutual funds, or any other asset situated in India are taxable in India. The rates depend on whether the gain is short-term or long-term.

Business income from Indian operations — income from a business controlled or set up in India is taxable here.

TDS Rules for NRIs — Why You Often Overpay

Tax Deducted at Source works differently for NRIs compared to resident Indians. For most payments to NRIs, TDS is deducted at higher rates — often 30% plus surcharge and cess on gross income, without considering deductions or exemptions.

This means an NRI receiving rent of ₹10 lakh per year has TDS deducted at approximately ₹31,200 on the full amount, even though their actual tax liability after standard deduction and home loan interest may be zero or much lower.

The solution is a Lower TDS Certificate under Section 197. By applying on the income tax portal with a projection of your actual tax liability, you can get the TDS rate reduced to match your real obligation. This prevents large amounts from being locked with the Income Tax department for months while you wait for a refund.

Key TDS rates applicable to NRIs:

Interest on NRO accounts — 30% plus surcharge and cess. Rental income — 30% plus surcharge and cess under Section 195. Property sale proceeds paid to NRI seller — 20% on long-term gains or 30% on short-term gains, plus surcharge and cess, deducted by the buyer. Dividends — 20% plus surcharge and cess.

Which ITR Form Should NRIs File?

NRIs cannot file ITR-1 (Sahaj) under any circumstances. The correct forms are:

ITR-2 — for NRIs with income from salary, house property, capital gains, or other sources, but no business income. This is the most commonly used form for NRIs.

ITR-3 — for NRIs who have income from a proprietary business or profession in India in addition to other income.

ITR-2 requires careful attention to Schedule FA (Foreign Assets disclosure), Schedule FSI (Foreign Source Income), and Schedule TR (Tax Relief). These schedules are frequently missed, leading to defective return notices from the Income Tax department.

DTAA — How NRIs Avoid Double Taxation

India has Double Taxation Avoidance Agreements with over 90 countries including the USA, UK, UAE, Australia, Canada, Singapore, and Germany. These treaties ensure that NRIs are not taxed twice on the same income — once in India and again in their country of residence.

DTAA benefits work in two ways. Under the exemption method, income taxed in one country is exempt in the other. Under the tax credit method, the tax paid in one country is given as a credit against the tax liability in the other country.

To claim DTAA benefits in India, you need a Tax Residency Certificate (TRC) from your country of residence confirming that you are a tax resident there, and Form 10F filed on the Indian income tax portal. Without these documents, your bank or the Income Tax department will not extend DTAA benefits and full TDS will be deducted.

DTAA provisions can significantly reduce your tax outgo. For example, under the India-UAE DTAA, UAE residents pay no tax in UAE and can claim relief in India. Under India-USA DTAA, specific rates apply to dividends, interest, and royalties that are lower than domestic rates.

Capital Gains Tax for NRIs

Capital gains rules for NRIs largely mirror those for residents, but with important differences in TDS obligations and reinvestment options.

Property sale — Long-term capital gains (property held over 24 months) are taxed at 12.5% without indexation for sales after July 23, 2024 under the new regime, or 20% with indexation under the old regime for eligible cases. Short-term gains are taxed at slab rates.

Equity and mutual funds — Long-term capital gains on listed equity shares and equity mutual funds above ₹1.25 lakh are taxed at 12.5%. Short-term gains are taxed at 20%.

NRIs can claim capital gains exemptions under Sections 54, 54EC, and 54F by reinvesting proceeds into another residential property or specified bonds — subject to conditions and time limits.

NRO to Foreign Account — How Repatriation Works

One of the most common pain points for NRIs is moving money from their NRO account to their foreign bank account. The process is governed by FEMA and requires specific documentation.

NRIs can repatriate up to USD 1 million per financial year from their NRO account. The requirements are that all applicable taxes must have been paid on the funds, and Form 15CA and Form 15CB must be filed before the bank processes the outward remittance.

Form 15CB is a certificate issued by a practising Chartered Accountant confirming that taxes have been paid on the remittance amount and the applicable DTAA provisions have been considered. Form 15CA is then filed on the income tax portal using the details from Form 15CB.

Without these forms, your bank cannot legally process the international transfer. Many NRIs are unaware of this requirement and face delays or are forced to use informal channels unnecessarily.

Key Deadlines for NRIs — AY 2025-26

ITR filing deadline — 31st July 2025 for AY 2025-26 for NRIs without audit requirement. Belated return — can be filed up to 31st December 2025 with a late fee of ₹1,000 (if income below ₹5 lakh) or ₹5,000. Updated return (ITR-U) — can be filed within 2 years from the end of the relevant assessment year with additional tax payment. Lower TDS certificate application — should be filed well before income is received to avoid full TDS deduction.

Common Mistakes NRIs Make with Indian Taxes

Not filing ITR assuming TDS has covered all liability — TDS does not eliminate the filing obligation. Filing ITR-1 instead of ITR-2 — renders the return defective. Not disclosing foreign assets in Schedule FA — attracts penalties under Black Money Act. Missing DTAA benefit claims — results in excess tax payment. Not applying for Lower TDS Certificate — locks refundable amounts with the department for months. Not maintaining Form 26AS — leads to mismatches and notices. Treating NRE interest as taxable — NRE and FCNR interest is fully exempt. Not filing on return to India — RNOR status requires careful handling in the first two years after return.

How NRI Tax CA Can Help

We handle complete NRI tax compliance — ITR-2 and ITR-3 filing with DTAA analysis, Schedule FA and Schedule FSI, Form 15CA and 15CB for remittances, Lower TDS Certificate applications under Section 197, and NRI property sale advisory including capital gains computation and reinvestment planning.

Every case is handled personally by a Fellow Chartered Accountant. Fixed price quoted upfront. 24 to 48 hour turnaround. All communication in writing.

Email us at hello@nritaxca.com or visit nritaxca.com to submit your case today.

Get a quick estimate of your NRI tax liability with our free NRI tax calculator India 2026-27. For expert ITR filing, DTAA claims, or TDS compliance, submit an enquiry to our NRI tax team.

This article is for general information purposes only and does not constitute legal or tax advice. Please consult a qualified Chartered Accountant for advice specific to your situation.

Use our free NRI Tax Calculator to instantly estimate your property TDS, refund amount and ITR obligation → Calculate Now

April 9, 2026

NRI Rental Income Tax India 2026 — TDS, ITR & DTAA Guide

✅ Updated for Income Tax Act 2025. Effective April 1, 2026 — Form 15CA replaced by Form 145, Form 15CB replaced by Form 146.

NRI Rental Income Tax India 2026 — TDS, ITR & DTAA Guide

If you are an NRI with a property in India earning rental income, you are liable to pay Indian income tax on that rent — regardless of which country you live in. The tenant deducts TDS, the income must be declared in your ITR-2, and DTAA may reduce your total tax burden. Done correctly, this is straightforward. Done incorrectly, it results in excess TDS, missed refunds, and compliance notices.

This guide covers everything an NRI landlord needs to know: TDS rates, how to lower them, ITR-2 filing, DTAA treatment of rental income, and how to repatriate rent abroad.

Is Rental Income from India Taxable for NRIs?

Yes. Under the Income Tax Act, income earned from property situated in India is taxable in India regardless of the owner’s residential status. If you are an NRI and your Indian property earns rent, that rent is Indian-sourced income and is subject to Indian income tax.

The tax is computed as follows:

Gross Annual Value (actual rent received or receivable)
Minus: Municipal taxes paid by owner
Equals: Net Annual Value (NAV)
Minus: Standard deduction of 30% of NAV (automatic — no bills needed)
Minus: Interest on home loan (if applicable — no limit for let-out property)
Equals: Taxable rental income

TDS on Rent Paid to NRI — What the Tenant Must Do

When a resident Indian pays rent to an NRI landlord, they are legally required to deduct TDS under Section 195 of the Income Tax Act. This applies regardless of the rent amount — there is no threshold exemption for payments to NRIs.

TDS Rate	Applicable When
30% + surcharge + cess = 31.2%	Standard TDS rate under Section 195
As per DTAA rate	If NRI provides TRC + Form 10F before deduction
As per certificate	If NRI obtains Lower TDS Certificate (Form 13)

The standard TDS rate of 31.2% on rent is one of the highest applicable rates for NRI income. Most NRI landlords can legitimately reduce this through DTAA or a lower deduction certificate.

Tenant’s TDS Compliance Checklist

Deduct TDS on rent payment each month at 31.2% (or applicable DTAA rate)
Deposit TDS with the government by the 7th of the following month
File Form 27Q (TDS return for NRI payments) quarterly
Issue Form 16A to the NRI landlord within 15 days of filing 27Q

If the tenant does not deduct TDS, they become personally liable for the tax amount plus interest and penalty. This is a common source of disputes between NRI landlords and resident tenants.

How to Reduce TDS on NRI Rental Income

Option 1 — DTAA Benefit

Most DTAA treaties treat rental income (income from immovable property) as taxable in the country where the property is situated — which means India. The DTAA generally does not reduce the Indian tax rate on rental income, but it does eliminate double taxation by requiring your country of residence to give you credit for Indian taxes paid.

However, TDS at source can still be reduced if the NRI provides the tenant with a Tax Residency Certificate (TRC) and Form 10F. While the DTAA treaty rate on rent may match the domestic rate in some cases, the formal submission signals to the tenant that the NRI is a legitimate tax resident of a treaty country and can support a Lower TDS application.

Option 2 — Lower TDS Certificate (Form 13)

The most effective way to reduce TDS on rental income is to apply for a Lower or Nil TDS Certificate under Section 197. This is filed as Form 13 on the Income Tax portal by the NRI (or their CA).

The certificate specifies the exact TDS rate the tenant must apply — based on the NRI’s actual tax liability after deductions, exemptions, and DTAA credits. For a property with significant home loan interest, the actual taxable income after all deductions may be much lower than the gross rent, resulting in an effective tax rate far below 31.2%.

Application must be filed well in advance — processing takes 4–8 weeks
Certificate is valid for the financial year specified
Once issued, share with tenant — tenant deducts at the certified rate
Renew every financial year

DTAA Treatment of Rental Income — By Country

Country	DTAA Treatment of Indian Rental Income	Double Tax Eliminated?
🇦🇪 UAE	Taxable only in India (UAE has no personal income tax)	Yes — no UAE tax liability
🇺🇸 USA	India has primary right to tax; USA gives Foreign Tax Credit	Yes — credit mechanism prevents double tax
🇬🇧 UK	India has primary right to tax; UK gives credit for Indian tax	Yes — credit mechanism prevents double tax
🇦🇺 Australia	India has primary right to tax; Australia gives foreign tax offset	Yes — offset mechanism prevents double tax
🇨🇦 Canada	India has primary right to tax; Canada gives Foreign Tax Credit	Yes — credit mechanism prevents double tax
🇸🇬 Singapore	India has primary right to tax; Singapore exempts or credits	Yes — treaty provides relief

Unlike NRO interest where DTAA reduces the rate at source, rental income is typically taxable in India at full Indian rates under most treaties. The key benefit is that you are not taxed twice — your country of residence gives you credit for the Indian tax you pay.

How to File ITR-2 for NRI Rental Income

NRIs must use ITR-2 to declare Indian rental income. ITR-1 is not available for NRIs. The ITR-2 for FY 2025-26 must be filed by July 31, 2026.

Documents Required

Form 16A from tenant (shows TDS deducted and deposited)
Rent agreement and rent receipts
Municipal tax receipts (if paid by you)
Home loan interest certificate (if applicable)
Tax Residency Certificate (for DTAA claim)
Form 10F (if claiming DTAA benefit)
PAN card and Aadhaar (linked)

Key Schedules in ITR-2

Schedule HP — House Property income computation (gross rent, standard deduction, home loan interest)
Schedule TR — DTAA relief claimed (tax paid in India credited against foreign tax liability)
Schedule FA — Foreign assets disclosure (required if you hold foreign assets as well)
Schedule AL — Assets and liabilities (if total income exceeds ₹50 lakh)

Repatriating NRI Rental Income Abroad

Once rent is credited to your NRO account, you can repatriate up to USD 1 million per financial year under the RBI’s Liberalised Remittance Scheme (LRS) for NRIs. The process requires a CA certificate under the Income Tax Act 2025.

Repatriation Process Under the New Forms (From April 2026)

Form 145 (replaced Form 15CA) — Filed by the remitter (you) on the Income Tax portal. Declares the nature of remittance, amount, applicable DTAA provision, and TDS compliance.
Form 146 (replaced Form 15CB) — Certificate issued by a CA after examining the transaction. Certifies that applicable taxes have been paid or provided for, that the DTAA provision cited is correct, and that the remittance is compliant.

Form 146 requires your CA to analyse whether the rental income has been correctly assessed, whether TDS was deducted at the right rate, whether any DTAA relief has been properly applied, and whether the ITR for the relevant year has been filed. This cannot be automated — it requires professional judgment on the specific facts of your case.

Tax Computation Example — NRI in Australia with Rental Property

Item	Amount
Annual rent received	₹6,00,000
Municipal taxes paid	₹18,000
Net Annual Value	₹5,82,000
Standard deduction (30%)	₹1,74,600
Home loan interest	₹2,40,000
Taxable rental income	₹1,67,400
Tax at 30% slab	₹50,220
TDS deducted by tenant (31.2% of ₹6L)	₹1,87,200
TDS refund due	₹1,36,980

This example shows why filing ITR-2 is critical even when TDS has already been deducted — in many cases, the actual tax liability after deductions is significantly lower than the TDS already paid, resulting in a substantial refund.

Common Mistakes NRI Landlords Make

Not informing the tenant to deduct TDS — If TDS is not deducted, the tenant becomes a defaulter. More importantly, you cannot claim the TDS credit that was never deducted. Ensure the tenant is compliant from day one.
Not filing ITR-2 annually — Even if TDS covers all tax liability, ITR-2 must be filed to claim refunds, formally record DTAA claims, and avoid notices from the Income Tax Department.
Not claiming home loan interest deduction — For a let-out property, there is no cap on the home loan interest deduction. NRIs with home loans on rental properties often leave a significant deduction unclaimed.
Not applying for Lower TDS Certificate — The standard 31.2% TDS locks up significant cash for 12–18 months until refund. A Form 13 application costs a small CA fee and recovers lakhs upfront.
Assuming rent cannot be repatriated without a CA — Repatriation requires Form 145 + Form 146. Attempting to transfer without these documents is a compliance breach. Budget for this as part of your annual cost of holding Indian property.
Not disclosing rental income in the home country’s tax return — Most countries tax their residents on worldwide income. While DTAA prevents double tax via credit mechanisms, you are still required to disclose Indian rental income in your Australian, UK, US, or Canadian return. Failure to disclose is a separate compliance issue in your country of residence.

Frequently Asked Questions

My tenant is not deducting TDS. What do I do?

Your tenant is legally obligated to deduct TDS under Section 195. Remind them in writing. If they continue not to deduct, they face interest (1% per month) and penalty. As the landlord, you can still file ITR-2 declaring the gross rent and pay the tax yourself — but you cannot claim a TDS credit that was never deposited. It is in your interest to ensure the tenant complies.

I have multiple rental properties in India. Does each need separate compliance?

Each property is reported separately in Schedule HP of your ITR-2. TDS is deducted separately by each tenant. However, the DTAA claim, Form 10F, and Lower TDS Certificate apply to you as the NRI taxpayer — not per property. One CA can handle all properties in a single ITR-2 filing.

Can I claim deductions on a property that is vacant?

A vacant property can be treated as “deemed let out” under Section 23, where the annual value is estimated based on comparable market rents. Alternatively, if you can establish it was genuinely not let out, you may claim it as self-occupied — in which case no rental income is taxed but home loan interest deduction is also capped at ₹2 lakh. A CA should advise on the optimal treatment based on your specific circumstances.

My property is managed by a property management company. Who deducts TDS?

If the property management company collects rent and remits it to you, they are the payer and are responsible for TDS deduction under Section 195 if they know you are an NRI. If the company collects rent on your behalf and the final tenant is the payer, it depends on the arrangement. This should be clarified in your property management agreement — an incorrect TDS deduction setup creates compliance risk for both parties.

How do I repatriate my rental income to my bank account abroad?

Rental income received in your NRO account can be repatriated up to USD 1 million per year. The process: your CA prepares Form 146 after reviewing your ITR and TDS compliance. You then file Form 145 on the Income Tax portal. Both documents are submitted to your bank, which processes the international transfer. Do not attempt repatriation without these documents — banks are required to verify compliance before remitting.

Is the Standard Deduction of 30% available to NRIs?

Yes. The 30% standard deduction on Net Annual Value is available to all property owners, including NRIs. It is automatic — no bills, no proof of repairs or maintenance is required. It covers all repairs, maintenance, and property management expenses as a flat deduction.

How We Handle NRI Rental Income at NRI Tax CA

Our rental income service for NRIs covers the complete compliance cycle — not just ITR filing. We advise on Lower TDS Certificate applications, ensure DTAA is correctly applied, file ITR-2 with all deductions claimed, and prepare Form 145 and Form 146 for repatriation. Our fee is fixed. There are no hidden charges based on refund amount or property value.

Service	Price
NRI ITR-2 — Rental income (single property)	Starting ₹3,999
NRI ITR-2 — Multiple properties + DTAA	Starting ₹5,999
Lower TDS Certificate (Form 13) application	Starting ₹2,999
Form 145 + 146 for rental income repatriation	Starting ₹5,999

Have rental income in India and unsure if your compliance is correct?
Email hello@nritaxca.com — we’ll review your situation at no charge and tell you exactly what’s needed.

Calculate your NRI rental income tax and TDS liability with our free NRI tax calculator. Need help filing ITR or Form 15CA/15CB? Talk to our CA team at Bilash Paul & Associates.

Updated April 2026. Reflects Income Tax Act 2025 — Form 145 (replaces Form 15CA) and Form 146 (replaces Form 15CB) effective April 1, 2026.

March 21, 2026

DTAA for NRIs 2026 — Avoid Double Tax on Indian Income | Guide

✅ This guide is updated for the Income Tax Act 2025. DTAA benefits apply under the new provisions effective April 1, 2026.

DTAA for NRIs — How to Avoid Double Taxation on Indian Income (2026 Guide)

If you are an NRI earning income from India — rental income, interest on NRO accounts, capital gains from property or shares — there is a real risk of paying tax on that same income in both India and your country of residence. The Double Taxation Avoidance Agreement (DTAA) exists to prevent exactly this.

India has DTAA treaties with over 90 countries. Used correctly, DTAA can reduce your TDS rate from 30% to as low as 10%, eliminate double taxation entirely, and save you lakhs every year. Used incorrectly — or not used at all — you pay full tax twice.

This guide explains exactly how DTAA works, which countries have the best treaties with India, how to claim the benefit, and the critical steps most NRIs miss.

What is DTAA?

A Double Taxation Avoidance Agreement is a bilateral treaty between India and another country that determines which country has the right to tax specific types of income, and at what rate. When both countries have a right to tax the same income, the treaty specifies how much credit is given in one country for taxes paid in the other.

For NRIs, DTAA serves two purposes:

Reduced TDS rates — instead of 30% TDS on NRO interest, you may qualify for 10–15% under DTAA
Foreign tax credit — taxes paid in India are credited against your tax liability in your country of residence, eliminating double taxation

How DTAA Works in Practice — A Simple Example

You are an NRI in the UK. Your NRO fixed deposit earns ₹5 lakh interest in FY 2025-26.

Scenario	Without DTAA	With DTAA
TDS deducted in India	₹1,56,000 (31.2%)	₹75,000 (15% under India-UK DTAA)
Tax in UK (at 40% rate)	₹2,00,000 minus credit for Indian tax	₹2,00,000 minus credit for Indian tax
Total tax paid	₹2,00,000 (UK taxes globally, credits India TDS)	₹2,00,000 (same total — but ₹81,000 saved upfront)
Cash flow benefit	₹0 — full 31.2% deducted immediately	₹81,000 stays in your account

DTAA doesn’t always eliminate tax — it prevents double tax and reduces upfront TDS deduction, improving your cash flow significantly.

DTAA Rates by Country — Interest Income (NRO Accounts)

Country	Standard TDS	DTAA Rate on Interest	Annual Saving on ₹10L Interest
🇦🇪 UAE	31.2%	12.5%	₹1,87,000
🇺🇸 USA	31.2%	15%	₹1,62,000
🇬🇧 UK	31.2%	15%	₹1,62,000
🇦🇺 Australia	31.2%	15%	₹1,62,000
🇨🇦 Canada	31.2%	15%	₹1,62,000
🇸🇬 Singapore	31.2%	15%	₹1,62,000
🇳🇿 New Zealand	31.2%	10%	₹2,12,000
🇳🇱 Netherlands	31.2%	10%	₹2,12,000

Step-by-Step — How to Claim DTAA Benefit

Step 1 — Obtain Tax Residency Certificate (TRC)

A TRC is a certificate issued by the tax authority of your country of residence confirming that you are a tax resident there. This is the foundational document for any DTAA claim.

How to get TRC by country:

UAE: Apply to the Federal Tax Authority (FTA) online — issued within 5 working days
UK: Apply to HMRC using form RES1 — takes 4–6 weeks
USA: Apply to IRS using Form 8802 — takes 45–60 days
Australia: Apply to ATO — Certificate of Residency issued within 28 days
Canada: Apply to CRA — typically 2–4 weeks

Apply for your TRC at the start of each financial year (April 1). Many NRIs delay this and miss the benefit for the entire year because their TRC wasn’t ready when TDS was deducted.

Step 2 — File Form 10F Electronically

Form 10F is a self-declaration filed on the Indian Income Tax portal confirming your residential status and DTAA eligibility. It must be filed electronically on incometax.gov.in — paper submissions are no longer accepted.

Step 3 — Submit TRC and Form 10F to Your Bank / Payer

Provide both documents to your bank (for NRO FD interest), your tenant (for rental income), the company paying dividends, and any other payer of Indian income. The payer will then deduct TDS at the DTAA rate rather than the standard 30% rate.

Step 4 — Claim DTAA Relief in Your ITR-2

Even after claiming reduced TDS at source, you must declare the DTAA benefit in your Indian ITR-2 in Schedule TR (Tax Relief). This formally records the relief claimed and protects against any future dispute.

DTAA and Capital Gains — What Changes

Country	Capital Gains on Indian Property	Practical Impact
🇦🇪 UAE	Taxable only in India	No UAE tax on Indian property gain. Zero double taxation.
🇺🇸 USA	May be taxable in both	India taxes first. USA allows Foreign Tax Credit for Indian tax paid.
🇬🇧 UK	Taxable in India, credit in UK	UK gives credit for Indian CGT paid.
🇦🇺 Australia	Taxable in India, credit in AUS	Australia gives foreign tax offset for Indian CGT paid.
🇨🇦 Canada	Taxable in India, credit in CAN	Canada gives Foreign Tax Credit for Indian tax paid.

The Most Common DTAA Mistakes NRIs Make

Not applying for TRC in time — TRC takes 4–8 weeks. Apply in March for the new financial year.
Not filing Form 10F electronically — Paper Form 10F is no longer accepted. Electronic filing on the Income Tax portal is mandatory since 2023.
Not claiming DTAA in ITR-2 — Even if TDS was deducted at the correct DTAA rate, formally claim the benefit in Schedule TR of your ITR-2.
Assuming UAE NRIs pay zero tax in India — UAE has no personal income tax, but Indian income is still taxed in India. You need TRC and Form 10F to access the reduced DTAA interest rate of 12.5%.
Using an expired TRC — TRC is valid for one financial year. Renew every year without fail.
Not claiming foreign tax credit in your home country — Claim the Foreign Tax Credit in your home country’s return to avoid paying tax twice.

DTAA and Form 146 (Formerly Form 15CB)

When you remit money from India using Form 145 and Form 146, the CA issuing Form 146 must certify the applicable DTAA provisions for the remittance. This requires analysis of which DTAA article governs the income, whether the remittance qualifies for relief, the correct tax rate, and whether TRC and Form 10F are in order. A Form 146 that incorrectly applies DTAA provisions can create tax demands later.

Frequently Asked Questions

I am an NRI in UAE. Do I pay zero tax in India?

No. India taxes income sourced from India regardless of where you live. NRO interest, rental income, and capital gains on Indian property are taxable in India. However, UAE imposes no personal tax, so you pay tax only to India — no double taxation. The DTAA reduces your TDS rate on interest to 12.5%.

My bank already deducted TDS at 30%. Can I claim the DTAA benefit now?

Yes — through your ITR-2. Declare the income, claim DTAA relief in Schedule TR, and the excess TDS is refunded. However, you needed TRC and Form 10F before the deduction to get the reduced rate at source.

Do I need a new TRC every year?

Yes. TRC is issued for a specific financial year. Submit a fresh TRC to your bank at the start of every financial year (April 1).

Can I claim DTAA benefit on NRE account interest?

NRE account interest is fully exempt in India — no TDS applies. DTAA relief is not relevant for NRE accounts. It is primarily relevant for NRO account income.

What if my country doesn’t have a DTAA with India?

Without a DTAA, India’s domestic tax law (Section 91) provides unilateral relief — you can claim credit for foreign taxes paid even without a treaty. A CA should calculate the most beneficial treatment for your situation.

My CA filed my ITR without claiming DTAA. Can I revise it?

Yes. A revised ITR can be filed up to December 31, 2026 for FY 2025-26. File a revised return claiming the DTAA benefit in Schedule TR to get the correct tax treatment and any refund due.

How We Handle DTAA at NRI Tax CA

Every filing we handle includes DTAA analysis as standard — not as an add-on. When we file Form 146 for a remittance, we analyse the applicable treaty article, verify TRC and Form 10F are in order, and certify the correct DTAA rate. When we file ITR-2, we include Schedule TR and Schedule TR-S to formally record all DTAA relief claimed.

Service	Price
Form 145 + 146 with DTAA analysis	Starting ₹5,999
NRI ITR-2 with DTAA + Schedule TR	Starting ₹4,999
DTAA advisory consultation	Email hello@nritaxca.com

Are you claiming all the DTAA benefits you’re entitled to?
Email hello@nritaxca.com — we’ll review your situation and tell you exactly what’s available.

Check your DTAA benefit with our free NRI tax calculator — it factors in treaty rates automatically. For ITR filing with DTAA claims, consult our NRI tax experts.

Updated April 2026. Reflects Income Tax Act 2025 provisions. DTAA treaty rates are subject to change — verify with your CA before filing.

March 17, 2026

Tag: DTAA

How to Claim Foreign Tax Credit in India — Form 44 (Form 67) Guide for NRIs 2026

Who Can Claim Foreign Tax Credit?

What Changed: Form 67 Is Now Form 44

The Critical Deadline You Must Not Miss

What Information You Need to File Form 44

How the Credit Is Calculated

Countries Where This Is Most Commonly Used

NRI Status and RNOR — The Transition Window

Get Your Form 44 Filed Correctly

NRI Tax in India 2026 — Complete Guide | Slabs, DTAA & ITR

Who is an NRI for Tax Purposes?

What Income is Taxable in India for NRIs?

TDS Rules for NRIs — Why You Often Overpay

Which ITR Form Should NRIs File?

DTAA — How NRIs Avoid Double Taxation

Capital Gains Tax for NRIs

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Key Deadlines for NRIs — AY 2025-26

Common Mistakes NRIs Make with Indian Taxes

How NRI Tax CA Can Help

NRI Rental Income Tax India 2026 — TDS, ITR & DTAA Guide

NRI Rental Income Tax India 2026 — TDS, ITR & DTAA Guide

Is Rental Income from India Taxable for NRIs?

TDS on Rent Paid to NRI — What the Tenant Must Do

Tenant’s TDS Compliance Checklist

How to Reduce TDS on NRI Rental Income

Option 1 — DTAA Benefit

Option 2 — Lower TDS Certificate (Form 13)

DTAA Treatment of Rental Income — By Country

How to File ITR-2 for NRI Rental Income

Documents Required

Key Schedules in ITR-2

Repatriating NRI Rental Income Abroad

Repatriation Process Under the New Forms (From April 2026)

Tax Computation Example — NRI in Australia with Rental Property

Common Mistakes NRI Landlords Make

Frequently Asked Questions

My tenant is not deducting TDS. What do I do?

I have multiple rental properties in India. Does each need separate compliance?

Can I claim deductions on a property that is vacant?

My property is managed by a property management company. Who deducts TDS?

How do I repatriate my rental income to my bank account abroad?

Is the Standard Deduction of 30% available to NRIs?

How We Handle NRI Rental Income at NRI Tax CA

DTAA for NRIs 2026 — Avoid Double Tax on Indian Income | Guide

DTAA for NRIs — How to Avoid Double Taxation on Indian Income (2026 Guide)

What is DTAA?

How DTAA Works in Practice — A Simple Example

DTAA Rates by Country — Interest Income (NRO Accounts)

Step-by-Step — How to Claim DTAA Benefit

Step 1 — Obtain Tax Residency Certificate (TRC)

Step 2 — File Form 10F Electronically

Step 3 — Submit TRC and Form 10F to Your Bank / Payer

Step 4 — Claim DTAA Relief in Your ITR-2

DTAA and Capital Gains — What Changes

The Most Common DTAA Mistakes NRIs Make

DTAA and Form 146 (Formerly Form 15CB)

Frequently Asked Questions

I am an NRI in UAE. Do I pay zero tax in India?

My bank already deducted TDS at 30%. Can I claim the DTAA benefit now?

Do I need a new TRC every year?

Can I claim DTAA benefit on NRE account interest?

What if my country doesn’t have a DTAA with India?

My CA filed my ITR without claiming DTAA. Can I revise it?

How We Handle DTAA at NRI Tax CA