Chartered Accountants◆Practising since 2016

USA to India · Repatriation

Moving profits from India to the USA

CA Utsav Dogra, Chartered Accountant, ICAI M. No. 542375 · Updated

In brief

Profit can leave India as a dividend (15% (10%+ voting power), 25% otherwise), royalty (15% (10% for equipment)), service fee, interest (10% (banks) to 15%) or buyback. A US corporate parent holding at least 10% can generally deduct the foreign-source part of the dividend, but cannot credit the Indian tax on it, so that tax is usually a final cost; fees and royalties are taxable in the US with Indian tax generally creditable.

What is specific to US companies

A US corporate parent with at least 10% can usually deduct the foreign-source dividend under Section 245A but cannot credit the Indian withholding on it, so that tax is a final cost. Royalties and service fees are taxable in the US, with Indian tax generally creditable, which can make them more efficient where substance supports them.

Routes compared

RouteIndian taxWhat it needs
Dividend15% (10%+ voting power), 25% otherwiseDistributable profits; board or shareholder approval
Royalty15% (10% for equipment)A real licence; arm's-length price
Service feeFees for included services: 15%, but only where they make technical knowledge available; other fees are business profits.Agreement, evidence of services, benchmark
Interest10% (banks) to 15%Registered ECB loan
BuybackDomestic rulesCompany-law limits; FEMA pricing

Our services

How SU and Company helps

We plan and document how money moves back to the parent, at the right treaty rate.

  • Dividend, royalty, fee and interest planning
  • Treaty withholding and remittance paperwork
  • Board and FEMA steps for dividends and buybacks
  • Indian figures and certificates for the parent's tax relief

Questions

Which route is cheapest?

It depends on the parent's home-country position and the substance behind each charge; dividends are simplest, fees and royalties need contracts and transfer pricing support.

General information as at 5 November 2026, not advice for a particular case. Indian and US rules change often; confirm the current position before acting. US law points should be confirmed with a US adviser.

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