The rate is the last line of the memo. The first line is: is this sum chargeable to tax in India at all, and under which head? Calling a payment “software” or “management fee” does not bind the Assessing Officer. Neither does a vendor email that says “gross-up, we will handle tax.”
This chart is characterisation. Rates follow the Finance Act / 2025 tables and the DTAA article that actually applies after residency and beneficial ownership. Confirm live rates on the portal and the treaty text. For the 15CA part once you know chargeability, use /guides/form-15ca-part-c-vs-part-d.
How this page differs
- Characterisation chart — not a scraped “TDS rates FY 2026” table that will be wrong next notification.
- Maps 1961 §195 to 2025 §393(2) / §394 using the same concordance as the public mapping page.
- Tells you when 15CB is even in play.
Who this is for
- Indian companies paying overseas vendors, licensors, lenders, or parent companies
- Buyers of property or shares from non-residents
- Start-ups paying SaaS, cloud, or contractor invoices to foreign entities
- CFOs who need a memo the 15CB can quote
How we work
- 01
Characterise the sum
Royalty, FTS, interest, dividend, capital gains, salary, or business income / PE. Mixed invoices get split, not averaged.
- 02
Apply domestic chargeability, then DTAA
If not chargeable, withholding may be nil and 15CA may be Part D — still document it. If chargeable, compare domestic table vs treaty article.
- 03
Withhold, deposit, certificate, remittance pack
Challan, 27Q where applicable, Form 16A, then 15CA/CB for the outward. Lower-deduction certificates sit in the middle when granted.
What you receive
- Characterisation memo per payment type
- Domestic vs DTAA comparison without invented rates
- 15CA/CB and 197/395 support
- 27Q / 16A coordination with the TDS desk
Characterisation chart (rates are not printed)
Each row is a test, not a tariff. Where a DTAA exists, read the article, the protocol, and the beneficial-ownership / PPT / LOB clauses. Where it does not, the domestic table under section 393(2) (erstwhile 195) applies to chargeable sums. Surcharge and cess follow the Finance Act in force — we will not freeze them here.
Section 195 / §393(2) characterisation — confirm live rates and treaty articles before deducting.
| Payment | What we test | Usual treaty article | 15CA tendency |
|---|---|---|---|
| Royalty (IP, brand, some software licences) | Copyright vs copyrighted article; equipment royalty vs service | Royalty article | Often Part C + 15CB if chargeable and above threshold |
| Fees for technical services (FTS) | Make-available / consultancy / included services protocol | FTS or business-profits article | Part C when chargeable; Part D only if truly not chargeable |
| Interest | Debt-claim, thin-cap / associated-enterprise, exemption notifications | Interest article | Part C if chargeable |
| Dividend | Whether the sum is a dividend under company law and the treaty | Dividend article | Part C if chargeable; buyback / capital reduction may be a different head |
| Capital gains (shares, property) | Situs, 9(1) / equivalent, unlisted vs listed, immovable-property companies | Capital-gains article (often situs for property) | Part C when chargeable; see NRI property page |
| Business income / no PE | Permanent establishment, dependent-agent, server / warehouse facts | Business-profits article | Part D only after a PE memo you would defend |
| Salary / ESOP of an NRI | Exercise in India, days of presence, employer’s PE | Dependent-personal-services article | Often a 192/392 vs 195 border — do not guess |
| Reimbursement / cost allocation | Mark-up, third-party evidence, whether income accrues to the NR | Usually none if no income | Part D when the facts hold; Part C if it is a disguised FTS |
Grossing-up and “vendor will pay”
If the contract says tax is on the Indian payer, you compute on the grossed-up amount. If the vendor says they will “handle Indian tax,” you still have a 195 obligation unless a 197/395 certificate or a non-chargeability memo you would sign says otherwise. 206AA / 397(2) higher withholding when PAN is missing can still apply on top of a treaty discussion.
Common questions
Direct answers for searchers and answer engines
In PJRJ’s working concordance, payments to non-residents sit in the table under section 393(2), with related machinery in section 394. See /guides/income-tax-act-1961-2025-section-mapping.
No. The domestic table and the India–US DTAA article (and protocol) have to be read against your facts and the year of payment. A scraped percentage on a landing page would be malpractice.
15CB is tied to Form 15CA Part C (and bank practice), not to every 195 credit in the books. Book TDS and remittance information are related but not identical clocks.