TDS on ncd interest to NRI

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This discussion clarifies the Tax Deducted at Source (TDS) applicable to interest paid on Non-Convertible Debentures (NCDs) to Non-Resident Indians (NRIs). The consensus is that the applicable TDS rate is 20% under Section 195 for income from investments made by NRIs. It's also confirmed that NRIs cannot submit Form 15G or 15H to claim a lower deduction.

Anu Elizabeth Shaju

Anu Elizabeth Shaju (Querist)

20 May 2023 Hi, which rate is to be applied for deducting tds on interest on ncd paid to non residents.
Also can we collect form 15G/H from non residents.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

20 May 2023 30% plus cess applicable on NRI payment.
No such form can be collected from NRI.

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Anu Elizabeth Shaju

Anu Elizabeth Shaju (Querist)

20 May 2023 Sir, I have a query as can we charge 20% as when i check TDS rate chart under section 195 -"Income in respect of investment made by a Non-resident Indian Citizen" rate is given as 20%. Will interest on NCD come under this category
should we deduct 30% +cess 0r 20% or cess

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

20 May 2023 Agree with you it's 20%.

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