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A complete guide to the India-Australia DTAA for NRIs — TDS rates on dividends, interest, royalties & capital gains, and how to claim relief with a TRC.
If you're an NRI in Australia earning interest, dividends, royalty, or rent from India, the India-Australia DTAA caps your Indian tax at 15% on most income. But that only kicks in if you file the right paperwork before the payment lands. Skip it, and your bank or tenant deducts TDS at the full domestic rate, sometimes 30%, and you spend the next year chasing a refund.
The India-Australia DTAA is a bilateral tax treaty signed on 25 July 1991 and notified in India on 22 January 1992. It stops the same rupee of income from getting taxed twice: once in India, where it's earned, and again in Australia, where you live. The legal hook is Section 90 of the Income-tax Act, 1961 for income up to FY 2025-26, and Section 159 of the Income-tax Act, 2025 for Tax Year 2026-27 onward.
Here's the part almost nobody mentions: the version governing your claim today isn't the plain 1991 text. It's the MLI-synthesised text, the original treaty read alongside the Multilateral Convention (MLI) that both countries ratified, effective from 1 October 2019. You can read the actual document on the Income Tax Department's DTAA page. Most competitor blogs skip this entirely, even though it's the one the department expects you to cite.
Applies to | Does NOT apply to |
|---|---|
NRIs tax-resident in Australia earning dividend, interest, royalty, FTS, rent, or capital gains from India | Indian residents with purely domestic income and no foreign angle |
Indian residents earning dividend, interest, or consulting income from Australia | NRIs who are tax residents of a third country (a different treaty governs them) |
Freelancers and consultants billing Australian clients remotely | Anyone without a valid Tax Residency Certificate for the year in question |
Property sellers who are NRIs based in Australia | Income already exempt under domestic law with no real double-tax exposure |
Splitting your year between India and Australia? If you cross 182 days in India under Section 6, you're an Indian tax resident for that year, and Article 4's tie-breaker rule decides which country actually taxes your global income.
These are treaty ceilings. Once you've filed a TRC and Form 10F, your payer can't deduct more than this. Skip the paperwork, and domestic rates apply instead.
Income type | DTAA rate (Article) | Domestic TDS without DTAA |
|---|---|---|
Dividends | 15% (Article 10) | 20% |
Interest (FD, bonds) | 15% (Article 11) | 30% (higher without PAN) |
Royalty — equipment use, ancillary services tied to equipment | 10% (Article 12(2)(a)) | 20% |
Royalty — patents, copyright, trademarks, general technical know-how | 15% (Article 12(2)(b)(ii)) | 20% |
Capital gains — real property | Taxable where the property sits (India, for Indian property) | Standard LTCG/STCG rates apply |
Capital gains — shares of an ordinary Indian company | Taxable where the company is resident (India); treaty gives no relief here | Same as above |
Salary | Taxable only in your residence country if under 183 days in the other state (Article 15) | — |
[Source: incometaxindia.gov.in DTAA synthesised text, India-Australia — https://incometaxindia.gov.in/dtaa]
The 10% vs 15% royalty confusion, resolved. ClearTax says royalty is 15%. NoBroker says royalty and FTS sit at 10%. Both are half right, and closing that gap is the whole point of this article. Article 12(2)(a) caps tax at 10% only for royalties tied to industrial, commercial, or scientific equipment, think leased machinery or ancillary technical services bundled with it. Every other royalty, including patents, trademarks, copyright, standalone consultancy, or "make available" technical knowledge under Article 12(3)(g), sits at 15% under Article 12(2)(b)(ii). Why? The treaty's original five-year transitional window, which allowed a temporary higher rate, expired back in 1996. So if your payment isn't equipment-linked, assume 15%, not 10%.
Governing law note: section numbers above follow the Income-tax Act, 2025 (in force from 1 April 2026) for Tax Year 2026-27 onward. For income up to FY 2025-26 (AY 2026-27), the 1961 Act numbering applies: Section 90 (DTAA relief), Section 195 (TDS on non-resident payments), Section 197 (lower/nil TDS certificate), Section 6 (residency). [VERIFY: exact successor sub-clause for Section 197 under Section 395 of the 2025 Act — confirm against the official Income Tax Act 1961 vis-à-vis 2025 mapping utility before publishing]
Example 1, common case: NRO FD interest
Priya moved to Melbourne in 2023 and kept an NRO fixed deposit in Pune earning ₹4,00,000 interest in FY 2025-26.
Without DTAA: bank deducts TDS at 30% = ₹1,20,000
With TRC and Form 10F filed before the interest gets credited, Article 11 caps the rate at 15% = ₹60,000
Net saving: ₹60,000. She still declares this interest in her Australian return and claims a foreign tax credit for the ₹60,000 already paid in India.
Want to run your own numbers before you file? Toolisky's foreign interest income tax calculator shows the gap between the domestic and treaty rates instantly.
Example 2, edge case: consulting royalty vs. equipment
Ramesh, based in Sydney, does two things for an Indian client this year: he licenses proprietary software (an equipment-linked royalty) for ₹6,00,000, and separately bills ₹3,00,000 for standalone technical consulting that isn't tied to any equipment.
Software licence: Article 12(2)(a) applies, 10% = ₹60,000 TDS
Standalone consulting fee: falls under Article 12(3)(g) "other royalties," Article 12(2)(b)(ii) applies, 15% = ₹45,000 TDS
Total TDS: ₹1,05,000, not a blanket ₹90,000 (10% on both) or ₹1,35,000 (15% on both). The two payments sit under different sub-clauses on the same invoice relationship, and this is exactly where most payers get it wrong.
Get your Tax Residency Certificate (TRC) from the Australian Taxation Office for the relevant year. It's valid for one financial year only, so you'll need a fresh one annually.
Check whether your TRC covers all five Rule 21AB details: status, nationality, TIN, residency period, and address. Missing any of these? Form 10F becomes mandatory.
Log in to the Income Tax e-filing portal at incometax.gov.in using your PAN, or register without one, since CBDT allows PAN-less Form 10F registration for non-residents.
Navigate to e-File > Income Tax Forms > File Income Tax Forms, search for "Form 10F," and select it.
Fill in your TRC and residency details, attach the TRC, and verify using a Digital Signature Certificate or Electronic Verification Code.
Share the acknowledgement and TRC with your Indian payer, the bank, tenant, or company, before they make the payment, so TDS goes out at the treaty rate from the start.
For Tax Year 2026-27 income, file Form 41 under Section 159(8) of the 2025 Act instead of Form 10F. [VERIFY: exact form number and rule citation for Form 41 — this mapping isn't yet confirmed against the official incometaxindia.gov.in mapping utility; cross-check before relying on it]
Payer already deducted TDS at the higher domestic rate before you filed Form 10F. That specific deduction can't be reversed. File your Indian ITR (typically ITR-2) and claim a refund of the excess TDS. This takes a full assessment cycle, so plan your filing months ahead rather than scrambling after the fact.
Your TRC application from the Australian side is delayed or incomplete. Ask your payer to hold the payment if that's possible, or accept higher TDS for now and recover the difference through your ITR refund. One thing you shouldn't do: backdate a TRC. Assessing officers routinely reject certificates dated after the income was already paid.
Payer applied the wrong DTAA article, taxing your equipment royalty at 15% instead of 10%, or the other way round. Write to their finance team, citing the specific Article 12(3) sub-clause your payment falls under, backed by your invoice description. If they won't correct future payments, you can still claim the excess as a refund through your ITR without needing their cooperation retroactively.
Document | Digital copy accepted | Where to get it |
|---|---|---|
Tax Residency Certificate (TRC) | Yes | Australian Taxation Office |
Form 10F (or Form 41 from FY 2026-27) | Yes, e-filed | Income Tax e-filing portal |
PAN (optional but recommended) | Yes | NSDL/UTIITSL or the Income Tax portal |
Invoice or income proof matching the claimed DTAA article | Yes | Self-generated, or your Indian payer |
Proof of Australian tax residency address | Yes | ATO correspondence, utility bill |
If your Indian payer fails to deduct TDS at all, they face a penalty under Section 271C of the Income-tax Act, 1961, equal to the entire amount they should have deducted, plus interest under Section 201(1A): 1% per month for non-deduction, 1.5% per month for late deposit. [Source: incometax.gov.in TDS Compliance FAQ]. [VERIFY: exact successor section number for Section 271C under the Income-tax Act, 2025 — not yet confirmed against the official mapping utility].
On your side as the NRI recipient, claiming a DTAA rate without a valid TRC and Form 10F can get you reassessed with interest on the shortfall. The penalty technically lands on the deductor first, but you're the one who ends up paying the difference and the interest.
It's never automatic. You have to actively claim it. Skip the TRC and Form 10F, and your Indian payer deducts TDS at the full domestic rate, leaving you to recover the excess through your tax return instead of paying less upfront.
Form 10F is filed by non-residents, like an NRI in Australia, to claim DTAA relief on Indian income. Form 10FA runs the other way: Indian residents file it with the Indian tax department to get their own TRC, so they can claim relief in Australia or another treaty country.
Both, depending on what's being paid. Article 12(2)(a) caps equipment-linked royalties and their ancillary services at 10%. Everything else, including standalone consultancy and IP licensing, falls under Article 12(2)(b)(ii) at 15%, since the treaty's original lower transitional rate expired in 1996.
Under Article 15, your salary stays taxable only in your country of residence if you're present in the other country for 183 days or fewer in that income year, your employer isn't a resident there, and your salary isn't charged to a permanent establishment there. Cross 183 days, and the source country gets taxing rights too.
No. CBDT lets non-residents register and file Form 10F on the e-filing portal without one. A PAN still helps, though, since it makes tracking your TDS credits in Form 26AS far easier when you sit down to file.
Yes, but Article 13 doesn't lower the rate. Real property gains stay taxable in India regardless of where you live. What the treaty does is stop Australia from taxing the same gain again without crediting the Indian tax you've already paid. Run your numbers on Toolisky's capital gains tax calculator before you sell, since it shows the NRI TDS-versus-actual-liability gap that catches most sellers off guard.
Then Form 10F becomes mandatory, not optional. Rule 21AB lists five specific details a TRC must carry. Miss even one, TIN included, and you have to self-declare it through Form 10F before your payer can apply the treaty rate.
That deduction stands for the payment already made. But you can claim the excess back by filing your Indian ITR for the year and reporting the correct DTAA-eligible rate. File Form 10F now so this doesn't repeat next quarter.
It used to create exactly that risk. Under Article 23, Australia's deemed source rule treated certain India-sourced payments as Australian-sourced too, layering tax at both ends. The Australia-India Economic Cooperation and Trade Agreement (AI-ECTA), effective 29 December 2022, removed this for remote technical services falling under Article 12(3)(g) that Australian domestic law doesn't classify as royalty. Still, check whether your specific payment type is actually covered before assuming you're clear.
Article 13(5) lets India tax those gains because that's where the company is resident, regardless of where you personally live. Unlike some treaties that shift taxing rights entirely to your residence country, this one doesn't. Australia will typically credit the Indian tax you've paid, but it won't exempt the gain outright.
Pull your TRC application together before your next Indian dividend, interest, or royalty payment falls due. Filing Form 10F even a week late means the higher domestic rate applies to that specific payment. For a fuller walkthrough of how the DTAA credit flows into your foreign income reporting, see Toolisky's NRI foreign interest tax guide, and if Australian dividends are also part of your picture, the foreign dividend tax calculator breaks that down the same way. For the treaty text itself, go straight to the Income Tax Department's DTAA page.
For educational purposes only. Verify all figures at official sources before acting. Toolisky is not affiliated with any government body. Consult a qualified CA or legal professional before making compliance decisions. See toolisky.com/accuracy-and-limitations.
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