Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Two methods: exemption and credit
Treaties relieve double tax in two ways. Under the exemption method, certain income is taxed in only one country. Under the credit method, both may tax it, but your residence country gives credit for the Indian tax paid. India taxes your India-source income; you then relieve it at home.
Lower treaty rates — and how to claim them
Many of India’s treaties cap the tax on interest at 10–15%. To get the lower rate rather than the full domestic rate, give the payer a Tax Residency Certificate (TRC) from your country, Form 10F, and your PAN. Example: NRO interest normally suffers about 30% TDS; under a treaty this can fall to around 15%. Treaty rates differ by country — confirm yours.
Claiming credit and filing
Where India has taxed income that your home country also taxes, you claim a foreign tax credit in your residence-country return, and in India you may file Form 67 with your return. Keeping your TRC and Indian TDS certificates is what makes the credit stick. Our NRI income tax compliance service can handle the Indian side.