What is specific to US companies
The India–US treaty is less generous than many: 15% on dividends to a 10%+ holder and 15% on royalties and fees for included services. Fees count as included services only if they make technical knowledge available or are ancillary to a royalty, so many routine service fees are business profits instead. The treaty leaves capital gains to domestic law.
Treaty rates
| Income | Indian tax under the treaty |
|---|---|
| Dividends | 15% (10%+ voting power), 25% otherwise |
| Interest | 10% (banks) to 15% |
| Royalties | 15% (10% for equipment) |
| Technical service fees | Fees for included services: 15%, but only where they make technical knowledge available; other fees are business profits. |
| Gains on Indian shares | Left to domestic law, so India can tax the gain. |
Permanent establishment
Services performed in India through employees for more than 90 days in a 12-month period create a permanent establishment.
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
Does the treaty always beat Indian domestic rates?
The lower of the treaty and domestic rate applies, provided the recipient is the beneficial owner and holds a valid residency certificate.
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.