Section 195 : TDS rates for NRI (Non-Resident Indian)

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By Hiral Vakil on February 18, 2019

There is no threshold limit under section 195, hence TDS will be deducted from the entire income/amount. TDS shall be deducted at the time of making payment.  Different TDS rates applicable to NRI individuals and companies are in the following table:

TDS rates for NRI u/s 195:

Nature of PaymentOther than Company Company
Income from the investment made by NRI Citizen20%NA
Income by way of Long Term Capital Gains referred to in  u/s 115E in case of an NRI Citizen10%NA
Income by way of Long Term Capital Gains referred to in sub-clause (iii) of clause (c) of sub-section (1) of section 112 10%10%
Income by way of Long Term Capital Gains as referred to in section 112A  10%10%
Short Term Capital Gain income from shares and securities referred to in Section 111A15%15%
Anu other income by way of Long Term Capital Gains (Other than referred in 10(33), 10(36) and 112A 20%20%
Income by way of interest payable by a government or an Indian concern on money borrowed or debt incurred by government or Indian concern in foreign currency (Other than interest income referred in Section 194LB or Section 194LC)  20%20%
Income by way of Royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India10%10%
Income by way of royalty [not being royalty of the interest nature referred in above] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy. 10%10%
Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy10%10%
Any Other Income30%40%

TDS at the higher rate of 20% or TDS rate,  whichever is higher, needs to be deducted if PAN of NRI is not available. Once TDS is deducted by a deductor, TDS return needs to be filed in Form 27Q for that particular quarter.