Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The default rate
Banks deduct TDS on NRO interest at about 30% plus surcharge and 4% cess for NRIs — the full non-resident rate, versus 10% for a resident. Confirm the current rate and surcharge per the Finance Act.
Cut it with a treaty
India’s tax treaties typically cap interest tax at 10–15%. To get the lower rate, give your bank a Tax Residency Certificate, Form 10F, and your PAN. Without these, the bank applies the full domestic rate, leaving you to reclaim the excess by filing a return.
A worked example
Example: ₹5 lakh of NRO interest suffers about ₹1.5 lakh TDS at 30%. Under, say, the India-UK treaty at 15%, that falls to about ₹75,000 — provided you lodged your TRC and Form 10F with the bank in time. If you missed it, file an ITR to recover the difference. The TRC and Form 10F must usually be lodged before the interest is credited for the bank to apply the lower rate, so timing matters — giving them in April for the year ahead is cleaner than chasing a refund afterwards. Form 10F is now filed online and is valid for a limited period, so it needs renewing. Our NRI tax service can set up the treaty rate and file your return.