FTS Taxable under 115A

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cfo sattva (Querist)

17 September 2026 1.What are the exact conditions that must be satisfied for FTS to qualify for the 20% rate under Section 115A(1)(b)?
2.In particular, Section 115A refers to FTS received from Government/Indian concern in pursuance of an agreement and contains conditions regarding Central Government approval/industrial policy. Are these conditions applicable to every FTS payment?
3.If the conditions of Section 115A are not satisfied, what would be the correct TDS rate under Section 195 in a non-DTAA case?
4.What documents/forms are required to substantiate the 20% rate—Form 15CA/15CB, PAN, TRC, Form 10F, agreement, declarations, etc.?
5.Is Form 15CB mandatory for applying the 20% rate under Section 115A?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

17 September 2026 To synthesize these compliance requirements, securing the 20% FTS rate under Section 115A hinges on a valid agreement aligned with government industrial policy. When these criteria are met in a non-DTAA scenario, you must secure the payee's PAN and file Form 15CA, along with Form 15CB if the annual remittance exceeds ₹5 lakh. Failing to meet these conditions subjects the payment to standard corporate rates of 40% for foreign companies under Section 195.

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