Tds on nro deposit

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what is the rate at which tds is applied on interest on nro term deposits.
Replies (1)

Generally it is 30.9% (ie 30% tax 2% EC & 1% SHEC)

 

This 30.9% is payable on the whole interest amount starting from Re 1 ie no min exemption limit is there. (It is pertinent to note that in case of interest on domestic deposits upto Rs 10,000 no TDS shall be deducted which is not the case with NRO deposit)

 

But if the non resident belongs to the country with which India has signed a Double Taxation Avoidance Agreement (DTAA) then the rate as specified in the agreement shall be charged. 

 

If rate provided in DTAA is more than 30.9% then the depositor then the depositor is eligible to claim refund from Income Tax Authority.

 

If rate provided in DTAA is less than 30.9% then the bank has to charge that lesser rate

 

Regards


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