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

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