NRI TDS Rate Card 2026 -- Complete Quick-Reference Table (Print & Save)

By CA Mayank Wadhera (CA | CS | CMA | IBBI Registered Valuer), Founder of MKW Advisors | Legal Suvidha | DigiComply

Last Updated: March 2026 | Applicable for FY 2025-26 (AY 2026-27)

---

How to Use This Rate Card

This is a printable, bookmarkable quick-reference card containing every TDS rate an NRI needs for FY 2025-26. No long explanations -- just the numbers, organized in six tables.

Three things to know before reading these tables:

1. All rates below apply to NRIs and deemed NRIs only. Residents have different (usually lower) TDS rates -- see Table 5 for the comparison.
2. DTAA treaty rates (Table 2) override domestic rates when lower, but only if you furnish a valid Tax Residency Certificate (TRC) and Form 10F to the payer before payment. No documents, no benefit.
3. Surcharge applies only when total Indian income (including capital gains) crosses Rs. 50 lakh. If your total Indian income is below Rs. 50 lakh, ignore surcharge rows -- your effective rate is the base rate plus 4% cess.

Looking for detailed explanations, Section 197 lower TDS certificate process, refund walkthrough, or worked examples? Read our comprehensive guide: TDS on NRI Income -- Rates, Refund & Section 197 Guide.

---

Table 1: TDS on NRI Income by Type -- FY 2025-26

The master rate table. Every common income type, the governing section, base rate, effective rate with 4% health and education cess (excluding surcharge), and the threshold at which TDS kicks in.

Key notes on Table 1:

• Rows 1 and 2: In practice, buyers often apply TDS on the full sale consideration because they lack cost-of-acquisition details. Apply for a Section 197 certificate to bring TDS in line with actual capital gains.
• Row 3: The domestic rate of 30% can be reduced to 10-15% under DTAA for many countries -- see Table 2.
• Row 5: Dividend TDS of 20% can be reduced to 10-15% under most DTAAs -- see Table 2.
• Rows 13 and 14: NRE and FCNR interest exemption is available only while you hold NRI status. On becoming a resident, NRE FDs continue to earn tax-free interest until maturity, but FCNR deposits follow the same rule.

---

Table 2: DTAA Treaty Rates -- India's Treaties with 9 Major NRI Countries

These rates apply only when you furnish valid documentation to the payer before the payment date.

Documents required for every DTAA claim:

• Tax Residency Certificate (TRC) from your country of residence
• Form 10F filed electronically on the Indian income tax portal
• Active Indian PAN
• Self-declaration / No PE certificate (where applicable)

Key notes on Table 2:

• "Indian domestic law applies" for capital gains on immovable property means DTAAs do not reduce capital gains tax on property sales in India. Article 13 of most Indian treaties reserves India's right to tax such gains at domestic rates (12.5% LTCG / 30% STCG plus surcharge and cess).
• The NRI can apply whichever rate is lower -- the DTAA rate or the domestic rate. When the domestic rate is already lower than the treaty rate, domestic law prevails.
• US and Canada treaties: The higher 25% dividend rate applies when the beneficial owner holds less than 10% of the voting stock of the company paying dividends. For portfolio investors (most NRIs), the 15% rate applies.
• UAE treaty: Offers the most favourable rates among the major NRI countries -- 12.5% on interest, 10% on dividends, and 10% on royalty/FTS.
• Germany, Japan, Netherlands: 10% across the board on interest, dividends, royalty, and FTS -- the lowest treaty rates available.
• 4% health and education cess is added on top of DTAA rates for final effective rate (e.g., 15% DTAA rate becomes 15.60% effective).

---

Table 3: Surcharge Rates Applicable on NRI Capital Gains -- FY 2025-26

Surcharge is an additional tax levied on top of the base income tax when total Indian income exceeds specified thresholds.

Critical rule: Surcharge on long-term capital gains is capped at 15% regardless of total income. This means even if your total income (from a large property sale) exceeds Rs. 5 crore, the surcharge on LTCG will not exceed 15%. This cap does not apply to short-term capital gains.

Marginal relief: Where the surcharge results in total tax exceeding the incremental income above the threshold, marginal relief is available. This prevents a situation where a small increase in income causes a disproportionate increase in total tax.

---

Table 4: Effective TDS Rates After Surcharge + Cess (By Income Bracket)

This is the table that tells you the actual percentage the government will deduct from your income at different income levels.

4A: Effective Rates on Long-Term Capital Gains (Property, Listed Shares, Equity MF)

LTCG surcharge is capped at 15%, so 14.95% is the maximum effective rate on long-term capital gains regardless of the income amount.

4B: Effective Rates on Short-Term Capital Gains (Property held 24 months or less)

4C: Effective Rates on NRO Interest (30% Base Rate)

Note: Most NRIs earning only NRO interest will fall in the "up to Rs. 50 lakh" bracket. The 31.20% effective rate is the standard rate banks apply on NRO interest.

4D: Effective Rates on Dividend Income (20% Base Rate)

---

Table 5: TDS Comparison -- NRI vs Resident Indian (Side by Side)

This table exposes the magnitude of the TDS gap. Use it to understand why Section 197 certificates and DTAA claims are not optional -- they are essential.

The takeaway is clear: NRI TDS is a blunt, high-deduction system designed to collect maximum tax at source. The only tools to bring it in line with your actual liability are: (a) Section 197 lower TDS certificate, (b) DTAA treaty rate claims, and (c) ITR filing for refund of excess TDS.

---

Table 6: Key TDS Sections -- Quick Reference

A cheat sheet of every Income Tax section relevant to NRI TDS.

The single most important section for NRIs is Section 195. It is the master provision that governs TDS on any sum paid to a non-resident. Sections 194-IA, 194-IB, 194A, and 194J are resident-specific sections -- when the payee is an NRI, Section 195 overrides them.

---

One-Line Action Items

Use this checklist alongside the tables above.

1. Before any property sale: Apply for a Section 197 lower TDS certificate via Form 13 -- allow 45-60 days for processing.
2. Before NRO interest is credited: Furnish TRC and Form 10F to your bank to claim DTAA rates.
3. Before dividend record date: Submit DTAA documents to the company registrar or depository participant.
4. After every financial year: File ITR-2 by 31st July to claim refund of excess TDS deducted.
5. Keep PAN active: Link PAN with Aadhaar where required. Inactive PAN triggers 20% penalty TDS under Section 206AA.
6. Pre-validate your NRO account: On the income tax e-filing portal, ensure your NRO account is pre-validated for refund credit.
7. Maintain documentation: Keep original purchase deeds, CII records, bank statements, and improvement receipts -- they determine your indexed cost and therefore your actual capital gains.
8. Post-Budget 2026: If you are a buyer purchasing from an NRI, TAN is no longer required. Use the PAN-based challan mechanism to deposit TDS.

---

When Do DTAA Rates Apply? -- Quick Decision Tree

Step 1: Are you a tax resident of a country with which India has a DTAA? If no, domestic rates apply. If yes, proceed.

Step 2: Is the income type covered under the DTAA (interest, dividend, royalty, FTS)? If no (e.g., capital gains on property), domestic rates apply. If yes, proceed.

Step 3: Is the DTAA rate lower than the domestic Indian rate for that income type? If no, domestic rate applies (you always get the lower of the two). If yes, proceed.

Step 4: Do you have a valid TRC from your country of residence, and have you filed Form 10F on the Indian income tax portal? If no, you cannot claim the benefit -- domestic rates apply. If yes, furnish both to the payer before the payment date.

Result: Payer deducts TDS at the DTAA rate (plus 4% cess) instead of the domestic rate.

---

Quick Savings Calculator -- DTAA Benefit on NRO FD Interest

The savings are meaningful. On Rs. 10 lakh of NRO FD interest, an NRI in Germany saves over Rs. 2 lakh per year simply by furnishing the correct DTAA documents.

---

Get Expert Help with NRI TDS

Whether you need a Section 197 lower TDS certificate, DTAA documentation, ITR filing for refund, or end-to-end advisory on a property transaction -- our team handles it all.

Book a consultation: Client Portal

WhatsApp: +91-96677 44073 -- message us anytime, we respond within 24 hours

Email: [email protected]

MKW Advisors -- Serving NRIs across the US, UK, UAE, Singapore, Canada, Australia, Germany, Japan, Netherlands, and 30+ countries.

---

Frequently Asked Questions (FAQ)

1. What is the TDS rate on NRI property sale for FY 2025-26?

For long-term capital gains (property held more than 24 months), TDS is 12.5% on the capital gains amount plus applicable surcharge and 4% health and education cess. The effective rate ranges from 13.00% to 14.95% depending on total income. For short-term capital gains (24 months or less), TDS is 30% plus surcharge and cess, with effective rates ranging from 31.20% to 42.744%. In practice, TDS is often applied on the full sale consideration rather than actual gains -- apply for a Section 197 certificate to correct this.

2. Which DTAA countries offer the lowest TDS rates on NRO interest?

Germany, Japan, and Netherlands offer the lowest treaty rate at 10% on interest income. UAE offers 12.5%. US, UK, Canada, Singapore, and Australia offer 15%. All DTAA rates require you to furnish a Tax Residency Certificate and Form 10F to the bank before the interest payment date.

3. Is surcharge on long-term capital gains capped?

Yes. Surcharge on long-term capital gains is capped at 15%, regardless of the total income amount. This means the maximum effective TDS rate on LTCG is 14.95% (12.5% base + 15% surcharge on that + 4% cess). This cap does not apply to short-term capital gains, where surcharge can go up to 37% for income above Rs. 5 crore.

4. Do NRIs get threshold exemptions for TDS like residents do?

No. Residents enjoy threshold exemptions -- for example, no TDS on FD interest up to Rs. 40,000 (Section 194A), no TDS on dividends up to Rs. 5,000 (Section 194), and no TDS on rent below Rs. 50,000/month (Section 194-IB). NRIs face TDS under Section 195 from the very first rupee of income on interest, dividends, and rent. The only exception is equity LTCG, where the Rs. 1.25 lakh annual exemption applies to both residents and NRIs.

5. Can I claim DTAA benefit on capital gains from property sale?

Generally, no. Most Indian DTAAs (Article 13) explicitly allow India to tax capital gains arising from the sale of immovable property situated in India at domestic rates. DTAA treaty benefits primarily reduce TDS on interest income, dividend income, royalties, and fees for technical services -- not on capital gains from property.

6. What documents do I need to claim DTAA rates at my bank?

You need: (a) a Tax Residency Certificate (TRC) issued by the tax authority of your country of residence -- for example, IRS Letter 6166 for US residents, (b) Form 10F filed electronically on the Indian income tax portal at incometax.gov.in, (c) an active Indian PAN, and (d) a self-declaration or No Permanent Establishment certificate where applicable. Submit these to your bank's NRI services team before the interest credit date. Documents must be renewed annually.

7. What happens if my PAN is inactive or I do not have a PAN?

Under Section 206AA, if the NRI payee does not furnish a valid PAN, TDS is deducted at 20% or the applicable rate, whichever is higher. For NRO interest (where the domestic rate is 30%), the rate remains 30%. But for dividends (where the domestic rate is 20%), it would jump to 20% regardless. For income types where the normal rate is below 20%, the penalty is significant. Keep your PAN active and linked as required.

8. Is TAN still required for buyers purchasing property from NRIs?

No. Following the Union Budget 2026 amendment, individual property buyers no longer need to obtain a TAN when purchasing from NRI sellers. TDS can be deposited using the buyer's PAN through a simplified online challan, similar to the Form 26QB mechanism used for resident-to-resident transactions under Section 194-IA. The substantive obligation to deduct TDS at the correct rate under Section 195 remains unchanged.

9. How do I reduce TDS on my NRI rental income from 30% to a lower rate?

Apply for a Section 197 lower TDS certificate by filing Form 13 on the TRACES portal. In your application, demonstrate that your actual tax liability on rental income (after the 30% standard deduction under Section 24 and other applicable deductions) is lower than the 30% flat TDS rate. The Assessing Officer will issue a certificate specifying the reduced rate, which you furnish to your tenant. Alternatively, if your country's DTAA has a beneficial rate for rental income, explore that route with professional guidance.

10. Where can I get professional help with NRI TDS, Section 197 certificates, and refund filing?

CA Mayank Wadhera and the team at MKW Advisors provide end-to-end NRI tax advisory services including Section 197 certificate applications, DTAA documentation, ITR filing and refund processing, buyer advisory for NRI property transactions, and FEMA repatriation compliance. Reach us through the Client Portal, via WhatsApp at +91-96677 44073, or by email at [email protected].

---

Disclaimer: This rate card is published by MKW Advisors for informational purposes only and does not constitute legal, tax, or financial advice. Tax laws are subject to change through legislative amendments, notifications, circulars, and judicial interpretation. The rates, thresholds, and provisions described herein are based on the law as applicable for FY 2025-26 (AY 2026-27) and may be amended in subsequent Finance Acts. DTAA rates are subject to treaty renegotiation and protocol amendments. For advice specific to your individual circumstances, consult a qualified Chartered Accountant. Contact MKW Advisors for personalized guidance.

Copyright 2026 MKW Advisors. All rights reserved.