Tax Treaty India
June 21st, 2011
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Tax Treaty India
Question: getting charged 30% TDS on bank interest in india as I am a NRI for tax purposes?
Axis bank is charging me 30% TDS though I reside in US and according to US-Indian tax treaty I should be charged only 15%.
1. Did I understand correctly that Axis bank can charge me only 15% TDS?
2. Can I by submitting form 15G avoid the 15% TDS too? For the coming financial year 2010-2011 my total taxable income from bank interest(savings account and Fixed Deposit) might be 20K, but income from mutual fund dividends might be 1.8 lacs or so. The mutual fund income is a projection.
3. Are there any links from the income tax site which mention that by submitting 15G I can avoid the 15% TDS so that I can convince Axis bank. When I tried talking to them, they told me they don’t know any such rules.
Answer: If an NRI receives interest on NRO account, the bank will deduct tax at source and credit only the net amount of interest to NRO account.
Section 195 of the Income Tax Act,1961
Tax is to be deducted at 30%.
NRIs should obtain TDS certificate in form No. 16A from respective bank.
NRI have also an option to apply to Income-Tax Officer (Assessing Officer) for no deduction of Tax or deduction of tax at lower rate in form No. 13 of Income-Tax Rules,1962.HMT
Implications of tax treaty re-negotiation part 2
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