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Foreign Dividend Tax Calculator India FY 2025–26

Q: Are foreign dividends taxable in India?

Yes, foreign dividends are taxable in India for Residents at applicable slab rates with Foreign Tax Credit (FTC) relief. For NRIs, foreign dividend from a foreign company is generally NOT taxable in India unless it accrues or is received in India.

Q: What is Foreign Tax Credit (FTC) and how is it calculated?

FTC is claimed to prevent double taxation. It's calculated as the LOWER of: (1) Foreign tax actually paid on the dividend, OR (2) Indian tax attributable to that dividend. You cannot claim more FTC than your Indian tax liability.

What Is Foreign Dividend Tax in India?

This calculator helps you compute your final Indian tax liability on foreign dividend income from overseas stocks, mutual funds, and ETFs for FY 2025–26. Designed for Indian residents earning global income and NRIs with foreign-source dividends, this free online calculator applies the latest tax law, Foreign Tax Credit (FTC) rules, surcharge, and 4% Health & Education Cess. Whether you earn dividends from US, UK, Singapore, or other countries, get instant clarity on your exact Indian tax position, foreign tax credit eligibility, and net after-tax dividend income in seconds. All calculations happen securely in your browser with zero data storage.

Why Foreign Dividend Taxation Is Confusing

Foreign dividend taxation confuses investors for several valid reasons:

Multiple Tax Jurisdictions: Your dividend may be taxed in two countries—the country where the company is incorporated (US, UK, Singapore, etc.) and India. Calculating which country takes priority and claiming foreign tax credits requires understanding both the Indian tax law and bilateral Double Taxation Avoidance Agreements (DTAA).

Exchange Rate Fluctuations: Foreign dividends are received in foreign currency (USD, GBP, SGD, etc.). The amount of Indian rupees you owe tax on depends entirely on the exchange rate on the date of dividend receipt. RBI rates differ from bank rates, adding confusion about which rate to use.

FTC Calculations & Caps: The Foreign Tax Credit (FTC) is NOT a full offset against Indian tax. It's capped at the lower of: (1) foreign tax paid, or (2) Indian tax attributable to that dividend. Many investors incorrectly assume they can claim the entire foreign tax paid, leading to underpayment of Indian taxes.

Residency Status Impact: As a Resident, all foreign dividend is taxable. As an NRI, foreign-source dividend from a foreign company is generally NOT taxable in India unless it accrues or is received in India. Misclassifying residency can result in either overpaying tax (if you're an NRI claiming resident status) or underpaying and facing penalties (if you're a resident but claimed NRI status).

Form & Schedule Compliance: You must file Form 67 (for FTC eligibility), Schedule FA (foreign assets), and Schedule FSI (foreign source income) in your ITR. Omitting these forms or incorrectly reporting foreign dividend leads to ITR rejection or scrutiny.

DTAA Treaty Rates: Depending on the country of dividend source, treaty withholding rates range from 5% to 25%. Understanding which treaty applies and claiming relief under Article 24 requires detailed knowledge of bilateral tax treaties.

How This Calculator Works

This calculator follows official Income Tax Act, 1961 rules for FY 2025–26 (Assessment Year 2026–27), applying foreign dividend taxation with strict accuracy for both Residents and NRIs.

Step 1: Determine Residency Status You're a Resident if you stayed in India for 182+ days in the financial year (April to March) OR 60+ days in the current year AND 365+ days in the preceding 4 years. Otherwise, you're Non-Resident (NRI). This classification determines whether foreign dividend is taxable in India.

Step 2: Understand Foreign-Source Dividend Definition Foreign dividend is income from dividends declared by foreign companies (US corporations, UK plc, Singapore entities, etc.) regardless of where you reside. This is taxable income under the head "Income from Other Sources" for Residents. For NRIs, foreign-source dividend is generally NOT taxable in India unless it accrues or is received in India.

Step 3: Convert Foreign Currency to INR Dividend received in foreign currency (USD, GBP, EUR, SGD, etc.) must be converted to Indian Rupees using the exchange rate on the date of dividend receipt or credit, whichever is earlier. Use the RBI Telegraphic Transfer (TT) Buying Rate published on the RBI website for that date. This converted amount is your taxable income in India.

Example: You receive USD 1,000 dividend on 15-Jan-2026. RBI TT Buying Rate on 15-Jan-2026 = ₹83.50/USD. Taxable income in India = USD 1,000 × ₹83.50 = ₹83,500.

Step 4: Apply Applicable Tax Regime to Foreign Dividend Income (Residents Only) Foreign dividend is taxed at the slab rates applicable under your chosen tax regime (Old or New) plus any surcharge and cess. Unlike salary income, NO standard deduction applies to foreign dividend income. You pay tax on 100% of the converted dividend amount.

For NRIs: If foreign dividend from a foreign company is taxable at all (which it generally isn't), it's taxed at a flat 30% rate plus surcharge and cess.

Step 5: Calculate Surcharge Surcharge is additional tax based on your total income (including the foreign dividend). Surcharge rates for FY 2025–26: • Income up to ₹50L: 0% surcharge • ₹50L–₹1Cr: 10% surcharge on tax • ₹1Cr–₹2Cr: 15% surcharge on tax • ₹2Cr–₹5Cr: 25% surcharge on tax • Above ₹5Cr: 37% surcharge on tax

Applies to both Residents and NRIs (if foreign dividend is taxable). Under New Regime, surcharge is capped at 25%.

Step 6: Calculate Foreign Tax Credit (FTC) Under Rule 128 & Article 24 DTAA FTC is claimed to prevent double taxation. The allowable FTC is the LOWER of: • Foreign tax actually paid on the dividend in the country of source (e.g., 15% US withholding tax) • Indian tax attributable to that dividend

Example: US dividend USD 1,000 with USD 150 (15%) withholding tax. In INR: dividend ₹83,500, foreign tax paid ₹12,525. Indian tax on ₹83,500 at your applicable rate = ₹20,000. FTC allowable = LOWER of (₹12,525, ₹20,000) = ₹12,525. Net Indian tax = ₹20,000 – ₹12,525 = ₹7,475.

Step 7: Add 4% Health & Education Cess Cess is calculated as 4% of (Income Tax + Surcharge). Mandatory for all taxpayers earning taxable foreign dividend.

Total Tax = Income Tax + Surcharge + Cess – Foreign Tax Credit

If FTC exceeds Indian tax due, you don't owe any tax in India. Excess FTC cannot be claimed as a refund but may be carried forward under certain conditions (not addressed in this calculator—consult a tax professional).

Step 8: NRI Exception – Foreign Dividend Not Taxable If you're an NRI earning foreign dividend from a foreign company (not an Indian company), and the dividend accrues and is received outside India, it's generally NOT taxable in India. This calculator will show Zero Indian Tax Liability for such cases. File Schedule FA to disclose the asset and income but no tax filing is required.

Who Can Use This Calculator

👤 Resident Individuals

Indian residents who spent 182+ days in India during the financial year and earn dividend from foreign stocks, ETFs, or mutual funds. All foreign dividend is taxable in India at your applicable slab rate with FTC relief.

🌍 Non-Resident Indians (NRIs)

Indian citizens or foreign nationals earning dividend from foreign companies while working or residing abroad. Foreign-source dividend from foreign companies is generally NOT taxable in India for NRIs unless it accrues or is received in India.

💎 High-Net-Worth Individuals

Wealthy investors with diversified international portfolios earning significant foreign dividend income. The calculator helps optimize FTC claims and plan tax-efficient dividend reinvestment strategies.

🔄 Returning NRIs

NRIs who have moved back to India or spent enough days to become Residents. This calculator helps understand the transition-year tax impact when residency status changes mid-year.

📦 Beneficiaries of Inherited Foreign Assets

Individuals who inherited foreign stocks or mutual fund units earning dividend. The calculator helps compute tax on inherited dividend income including FTC relief.

Step-by-Step: How to Use This Calculator

1.Determine your residency status: You're Resident if you spent 182+ days in India during the financial year (April to March) OR 60+ days this year plus 365+ days in the preceding 4 years. If neither condition is met, you're Non-Resident (NRI). This determines whether foreign dividend is taxable in India.
2.Identify your foreign dividend source: Foreign dividends are from companies incorporated outside India (US corporations, UK companies, Singapore entities, etc.). Specify the country of source; this helps determine applicable DTAA treaty rates and withholding tax rules.
3.Convert foreign currency to INR: Dividend received in foreign currency must be converted using the RBI Telegraphic Transfer (TT) Buying Rate on the date of dividend receipt or credit. This converted amount is your taxable income in India. Different dates may result in different rupee amounts.
4.Enter foreign tax paid: If the foreign company withheld tax at source (US withholding tax of 15%, UK dividend tax of 20%, etc.), enter the rupee equivalent of this tax. This foreign tax can be credited against your Indian tax liability under FTC rules.
5.Click 'Calculate Tax' to get instant results: The calculator will show your Indian tax before and after Foreign Tax Credit, surcharge, cess, and final tax payable.
6.Review the detailed breakdown: Understand each component of your tax calculation. Verify that FTC is correctly capped as the lower of foreign tax paid and Indian tax.
7.Plan your investments based on results: If your foreign dividend results in high Indian tax, consider rebalancing your portfolio. If you're near a residency threshold, changing residency status can significantly impact foreign dividend taxation.
8.Prepare for ITR filing: Collect all documentation—dividend statements, proof of foreign tax paid, RBI exchange rate for the dividend date, DTAA treaty certificate (if applicable). You'll need these for Form 67, Schedule FA, and Schedule FSI in your ITR.

Real-Life Examples

✓Rajesh, a 52-year-old Resident Individual, earned USD 2,000 dividend from US stocks with 15% withholding tax (USD 300). In January 2026, RBI TT rate = ₹84/USD. Dividend in INR = ₹1,68,000; Foreign tax paid = ₹25,200. His Indian tax under New Regime slab = ₹16,800 (10% of ₹1,68,000). FTC = LOWER of (₹25,200, ₹16,800) = ₹16,800. Net Indian tax = ₹16,800 – ₹16,800 = ₹0. He owes zero tax in India.
✓Priya, an NRI (worked in US for 8 months last year), received GBP 500 dividend from UK company with 20% withholding tax (GBP 100). RBI TT rate = ₹106/GBP. Dividend in INR = ₹53,000; Foreign tax = ₹10,600. Since the dividend is from a foreign company and accrued outside India, it's NOT taxable for her as an NRI. Indian tax liability = ₹0. She simply discloses the asset and income in Schedule FA of her ITR.
✓Vikram, a Resident, earned ₹5,00,000 from foreign ETF dividends with ₹80,000 foreign tax paid. Under Old Regime with progressive slabs: Indian tax = ₹1,00,000 (20% of ₹5,00,000 in the applicable slab). FTC = LOWER of (₹80,000, ₹1,00,000) = ₹80,000. Net Indian tax = ₹1,00,000 – ₹80,000 = ₹20,000.
✓Neha became a Resident after living in US for 3 years. She earned USD 3,000 dividend from Singapore company during the transition year (180 days in India + transition). Dividend = ₹2,52,000; Foreign tax paid ₹42,000 (for India portion). Her Indian tax liability under New Regime = ₹25,200. FTC allowed = ₹25,200. Net tax = ₹0. She files ITR as a Resident disclosing foreign assets.
✓Amit, a high-net-worth individual, earned ₹50,00,000 in foreign dividends as a Resident. Indian tax = ₹15,00,000 (30% in highest slab). Surcharge = 37% of ₹15,00,000 = ₹5,55,000. Cess = 4% of (₹15,00,000 + ₹5,55,000) = ₹82,200. Foreign tax credit = ₹10,00,000 (limited to FTC cap). Final tax = ₹15,00,000 + ₹5,55,000 + ₹82,200 – ₹10,00,000 = ₹11,37,200.
✓Kavya inherited 200 shares of a UK company earning GBP 400 annual dividend (no withholding under inheritance rules). She's a Resident. Dividend = ₹33,600; Indian tax = ₹3,360 (10% slab). No foreign tax paid, so FTC = ₹0. Net tax = ₹3,360 + Cess.
✓Sanjay, an NRI with a foreign company job, received dividend from his ESOP (Employee Stock Ownership Plan) with an Indian company while on assignment abroad. Even though he's an NRI, dividend from Indian company is taxable. Indian tax = ₹50,000. He files Schedule FA and ITR-2.
✓Divya, a Resident, earned dividend from both US stocks (₹2,00,000 with ₹40,000 foreign tax) and Indian companies (₹3,00,000). Total foreign dividend income in India context = ₹2,00,000. Indian tax = ₹20,000 (10%). FTC = ₹20,000. Net tax on foreign portion = ₹0. She combines all dividend income in ITR-2 filing.

Common Foreign Dividend Tax Mistakes to Avoid

⚠Using bank exchange rate instead of official RBI TT Buying Rate: Many investors convert foreign dividend using their bank's selling or buying rate, which differs from the official RBI TT Buying Rate. This results in incorrect taxable income and compliance issues. **Always use RBI TT Buying Rate on the date of dividend receipt or credit, whichever is earlier.** Document the rate for ITR filing.
⚠Claiming entire foreign tax as FTC without the lower-of rule: FTC is NOT a dollar-for-dollar offset against Indian tax. It's capped at the LOWER of: (1) foreign tax paid, or (2) Indian tax attributable to that dividend. Claiming the entire foreign tax withheld (when it exceeds Indian tax liability) is incorrect and leads to scrutiny. Many audits result from this mistake alone.
⚠Assuming all NRI foreign dividend is tax-free: Many NRIs incorrectly believe ALL foreign dividend is exempt from Indian tax. However, **dividend from an Indian company is ALWAYS taxable for NRIs**, regardless of NRI status. Verify the company's country of incorporation before claiming tax exemption.
⚠Forgetting to convert foreign currency to INR before calculating tax: Entering dividend as received in foreign currency (e.g., 'USD 1,000') instead of converting to INR leads to completely incorrect tax calculations. The taxable income is always the **INR amount**, not the foreign currency amount. Use RBI rate on receipt date for conversion.
⚠Overlooking surcharge and cess in total tax calculation: Many calculations stop at income tax, forgetting that surcharge (10-37% for income above ₹50L) and 4% cess on (tax + surcharge) significantly increase total liability. **Final tax = Income Tax + Surcharge + 4% Cess – FTC.** For high-net-worth individuals, surcharge and cess can double the tax amount.
⚠Confusing DTAA treaty withholding rates with Indian slab tax rates: DTAA treaty rates (e.g., US-India DTAA allows 15% withholding) determine the FOREIGN tax withheld, NOT your Indian tax liability. Your Indian tax is determined by your applicable slab rate under New Regime (0%, 5%, 10%, 15%, 20%, 25%, 30%). These are two separate calculations.
⚠Not maintaining proof of foreign tax paid (TDS proof not available): FTC cannot be claimed without documentary proof that foreign tax was actually paid. You must maintain: dividend statements showing tax withheld, foreign tax certificates, or bank statements confirming tax deduction. Without proof, tax authorities will reject FTC claim.
⚠Omitting Form 67, Schedule FA, or Schedule FSI from ITR filing: Foreign dividend taxation REQUIRES mandatory filing of: **(1) Form 67** for FTC claim, **(2) Schedule FA** for foreign asset disclosure, and **(3) Schedule FSI** for foreign source income reporting. Omitting any of these leads to **ITR rejection or scrutiny/demand notice**. This is non-negotiable.
⚠Not recalculating tax when residency status changes mid-year: If you transitioned from Resident to NRI (or vice versa) mid-year, foreign dividend tax treatment changes dramatically—from fully taxable with FTC (Resident) to not taxable (NRI). Recalculate based on residency status on the **date of dividend receipt**, not year-end status.
⚠Not carrying forward excess FTC to next financial year: If foreign tax paid exceeds Indian tax due in a year, excess FTC may be carried forward to future years (under certain conditions) to offset tax in those years. This calculator doesn't address carry-forward—if you had prior-year excess FTC, **consult a Chartered Accountant** for correct treatment.
⚠Filing ITR-1 instead of ITR-2 for foreign dividend income: Foreign dividend income requires filing **ITR-2 (or ITR-3 if you have business income)**, not ITR-1. ITR-1 has strict income limits and doesn't accommodate Schedule FA/FSI/Form 67 properly. Using wrong ITR form leads to rejection.
⚠Not disclosing foreign assets in Schedule FA: Even if your foreign dividend results in zero Indian tax (due to full FTC), **Schedule FA mandatory disclosure is still required** to declare the foreign asset (stocks, funds, holdings, value). Failure to disclose leads to penalties and demands under Benami provisions and Schedule FA non-disclosure rules.

Benefits of Using This Calculator

This free Foreign Dividend Tax Calculator for FY 2025–26 eliminates manual calculations and ensures accuracy for international dividend taxation. Here's what it delivers:

Instant Accurate Results: No manual slab lookups or calculator errors. Enter your foreign dividend (in INR), foreign tax paid, and residency status, and get complete tax calculation including FTC in seconds—all processed in your browser.

FY 2025–26 Tax Laws Built-In: The calculator is fully updated with current New Regime and Old Regime slab rates, surcharge percentages (0%-37%), 4% cess rules, and FTC capping under Rule 128. No need to search for updated rules annually.

Foreign Tax Credit Correctly Capped: FTC is automatically capped as the lower of (foreign tax paid, Indian tax). No risk of over-claiming FTC, which leads to compliance errors.

Resident vs. NRI Logic Accurate: Whether you're a Resident or NRI, the calculator applies correct rules. NRI earning foreign-source dividend from a foreign company sees zero Indian tax liability (as per law). Residents see full slab-based taxation plus FTC.

Surcharge & Cess Accurate: The calculator correctly applies surcharge tiers based on total income (₹50L–₹1Cr: 10%, ₹1Cr–₹2Cr: 15%, etc.) and mandatory 4% cess on (tax + surcharge). No surprises in final tax liability.

Transparent FTC Calculation: See exactly how your foreign tax credit is applied. Understand why the credit may be capped and why excess foreign tax paid cannot be refunded (but may carry forward).

ITR-Ready Breakdown: Results clearly show components for Form 67 (FTC claim), Schedule FA (foreign assets), and Schedule FSI (foreign source income). Preparation for ITR filing becomes straightforward.

Multiple Dividend Scenario Testing: Use different scenarios—what if dividend rate changes, exchange rate fluctuates, or foreign tax rate differs? See how each affects your final Indian tax instantly.

Completely Secure & Private: All calculations happen entirely in your browser. Your financial information never leaves your device, never stored on servers, never tracked. No accounts, no logins, no data collection.

Privacy & Data Safety

✓No data stored: We do not store, save, or archive any of your financial information
✓Browser-only calculation: All calculations happen on your device, nothing sent to servers
✓No tracking: We don't track, log, or monitor your use of this calculator
✓No third-party sharing: Your data is never shared with any third party

Frequently Asked Questions

❓Are foreign dividends taxable in India for Residents?▼

Yes, absolutely. For Resident Individuals, all foreign dividend income is taxable in India under the head "Income from Other Sources" at the applicable slab rates (0%, 5%, 10%, 15%, 20%, 25%, 30% under New Regime). You must pay Indian tax on dividend from US, UK, Singapore, and all other foreign companies.

However, India provides Foreign Tax Credit (FTC) relief under Rule 128 and Section 91 to prevent double taxation. The FTC is calculated as the LOWER of: (1) Foreign tax paid, or (2) Indian tax on that income.

For example, if you received USD 1,000 dividend from US stocks with 15% US withholding (USD 150), and your Indian tax on ₹83,500 (at RBI rate ₹83.50/USD) comes to ₹16,700, your FTC is capped at ₹12,525 (lower of USD 150 = ₹12,525 and ₹16,700).

❓Is foreign dividend income taxable for NRIs?▼

No. For Non-Resident Indians (NRIs), foreign dividend from a foreign company is generally NOT taxable in India if the dividend accrues and is received outside India.

However, there is one critical exception: **Dividend from an Indian company is ALWAYS taxable for NRIs**, regardless of NRI status. If you own shares of an Indian company, dividend received is taxable even if you're working abroad.

Important: You must still file Schedule FA in your ITR to disclose foreign assets, even if no tax is due. If your dividend is from an Indian company, the tax treatment changes—consult a Chartered Accountant.

❓What is Foreign Tax Credit (FTC) and how is it calculated?▼

Foreign Tax Credit is a mechanism to prevent double taxation. If your foreign dividend was already taxed in the source country (US 15% withholding, UK 20% dividend tax, etc.), you can credit that foreign tax against your Indian tax liability.

FTC is calculated as: **FTC = LOWER OF:** • Foreign tax actually paid on the dividend, OR • Indian tax attributable to that dividend

Example: Dividend ₹1,00,000 with ₹20,000 foreign tax paid. Indian tax on this income = ₹10,000. FTC = LOWER of (₹20,000, ₹10,000) = ₹10,000. Net Indian tax = ₹10,000 – ₹10,000 = ₹0.

The credit is capped at Indian tax, so you cannot claim more credit than your Indian tax liability on that dividend.

❓What exchange rate should I use to convert foreign dividend to INR?▼

Use the RBI Telegraphic Transfer (TT) Buying Rate on the date of dividend receipt or credit, whichever is earlier. The RBI publishes daily TT rates on its website.

Do NOT use: • Your bank's selling rate (used for buying foreign currency) • Your bank's buying rate (used for selling foreign currency) • Average of the month's rates

The RBI TT Buying Rate (https://www.rbi.org.in/Scripts/ReferenceRate.aspx) is the official rate for tax purposes in India. Using any other rate can lead to incorrect taxable income and compliance issues.

❓Is Form 67 mandatory to claim FTC?▼

Yes, Form 67 (Claim for Relief under Section 90/90A/91) is mandatory to claim Foreign Tax Credit. You must file this form along with your ITR to claim FTC relief.

Additionally, you must: • File Schedule FA (Foreign Assets) disclosing the foreign asset (stock, fund, etc.) • File Schedule FSI (Foreign Source Income) reporting the foreign dividend income and FTC claimed • Provide documentary proof of foreign tax paid (dividend statement showing tax withheld, foreign tax certificate, etc.)

Omitting Form 67, Schedule FA, or Schedule FSI leads to ITR rejection or scrutiny.

❓Can I claim FTC if no foreign tax was withheld?▼

If no foreign tax was withheld at source (some countries don't withhold tax on dividends), you can still file Form 67 to claim FTC = ₹0. You must still file the form and Schedule FA to ensure your ITR is complete and compliant.

However, if you know foreign tax is payable in the source country, you must pay and document it. Many countries allow self-assessment of dividend tax; ensure you've paid any tax due.

❓Is foreign dividend income reported separately in ITR?▼

Yes, foreign dividend income must be reported separately:

• **Schedule FA (Foreign Assets):** Disclose the foreign asset (stock holding, mutual fund units, ETF shares, etc.), country of source, and value. • **Schedule FSI (Foreign Source Income):** Report the dividend income, foreign tax paid, FTC claimed, and net income. • **Form 67:** File to formally claim FTC relief. • **ITR-2 or ITR-3:** The consolidated income tax return must include foreign dividend in "Income from Other Sources."

Failure to disclose in Schedule FA or report in Form 67 leads to ITR rejection and potential penalties.

❓What happens if foreign tax paid exceeds Indian tax on the dividend?▼

If foreign tax paid exceeds Indian tax due on the foreign dividend, your FTC is capped at the Indian tax. The excess foreign tax credit cannot be refunded in most cases but may be carried forward to subsequent years under specific conditions.

Example: Foreign dividend ₹1,00,000 with ₹25,000 foreign tax paid. Indian tax = ₹10,000. FTC = ₹10,000 (capped). Excess FTC = ₹25,000 – ₹10,000 = ₹15,000. This excess may be carried forward if eligible.

Consult a Chartered Accountant for carry-forward of excess FTC, as conditions apply based on your total income and residency status.

❓Do DTAA treaty rates override Indian tax slab rates?▼

No. DTAA (Double Taxation Avoidance Agreement) treaty rates determine the withholding tax in the foreign country, not your Indian tax liability.

Example: • US-India DTAA allows 15% withholding on dividends (lower than statutory US rate of 30%). • But your Indian tax is determined by your applicable slab rate (0%, 5%, 10%, 20%, 30% under New Regime). • If your slab rate is 30% and US withholds 15%, you may owe additional Indian tax.

Your Indian tax is always calculated at your applicable slab rate, then reduced by FTC (capped at the lower of foreign tax and Indian tax).

❓Are foreign dividends eligible for standard deduction?▼

No. Standard deduction (₹75,000 for New Regime, ₹50,000 for Old Regime) applies only to salary income from employment. Foreign dividend income is from "Other Sources" and does NOT qualify for standard deduction.

You pay tax on 100% of the foreign dividend (after FTC, if eligible).

❓What if I'm transitioning between Resident and NRI status?▼

If you changed residency status during the financial year (e.g., moved from India in mid-year, becoming NRI; or moved to India, becoming Resident), foreign dividend is taxed based on your status on the date of dividend receipt.

For the transition year: • Dividend received while Resident is taxed as a Resident (slab rates + FTC). • Dividend received while NRI from a foreign company is not taxed (NRI rule). • Dividend from an Indian company is always taxable, even for NRIs.

File your ITR declaring your residency status for the year and the date of transition. This ensures correct application of tax rules.

❓How do I determine my residency status for tax purposes?▼

Residency status is determined by your physical presence in India, not citizenship. You're a Resident if: • You stayed in India for 182 days or more during the financial year (April to March), OR • You stayed in India for 60+ days in the current year AND 365+ days in the preceding 4 financial years

If neither condition is met, you're classified as Non-Resident (NRI) for that financial year.

Residency status has MAJOR impact on your foreign dividend taxation: • **Resident:** All foreign dividend is taxable at slab rates with FTC relief available • **NRI:** Foreign dividend from foreign companies generally NOT taxable (with some exceptions)

❓What if I transition from Resident to NRI (or vice versa) mid-year?▼

If you change residency status mid-year, foreign dividend is taxed based on your status on the date of dividend receipt.

Example: You were a Resident for 180 days then left India. Dividend received while Resident is taxed as a Resident (slab rates + FTC). Dividend received after you became NRI is not taxed (if from foreign company).

File your ITR declaring your residency status for the year and the date of status change. This ensures correct application of tax rules. Misreporting residency can lead to penalties and demands from tax authorities.

❓Can I use my bank's exchange rate or must I use RBI rate?▼

You MUST use the RBI Telegraphic Transfer (TT) Buying Rate on the date of dividend receipt. Using any other rate (bank selling rate, bank buying rate, or average rates) is non-compliant and can lead to scrutiny.

The RBI publishes official daily TT rates: https://www.rbi.org.in/Scripts/ReferenceRate.aspx

Why RBI rate matters: • Official rate for tax purposes in India • Different from your bank's rates (banks add margins) • Using wrong rate leads to incorrect taxable income • Tax authorities verify rates during scrutiny • Documentation required: Keep RBI rate certificate for ITR filing

❓How do DTAA treaties affect my foreign dividend tax?▼

Double Taxation Avoidance Agreements (DTAA) determine the **withholding tax rate** in the foreign country, NOT your Indian tax liability.

Example: US-India DTAA allows 15% dividend withholding (lower than US statutory 30%). This is the foreign tax withheld.

Your Indian tax is calculated separately at your applicable slab rate (0-30% under New Regime). Then FTC is applied to avoid double taxation.

DTAA Treaty Rates (Common Countries): • **US, UK, Canada, Australia:** 15% dividend withholding • **Singapore:** 15% dividend withholding • **Netherlands:** 15% dividend withholding

Even if foreign tax is lower due to DTAA, your Indian tax is still calculated at your slab rate, and then FTC is capped.

❓What happens if I inherit foreign shares? Is inherited dividend taxable?▼

Yes, inherited foreign dividend is taxable in India if you're a Resident. The inheritance itself is not taxed in India, but the **dividend income generated from inherited shares is taxable**.

Taxable income = Dividend earned on inherited shares (converted to INR using RBI rate on receipt date)

The cost of inherited shares (for capital gains purposes in future) is the fair market value on the date of death of the deceased, not the purchase price paid by the original owner.

For foreign inherited shares: • File Schedule FA disclosing the asset • Report dividend income in Schedule FSI • Claim FTC if foreign tax is withheld • File Form 67 with your ITR-2

❓Is my financial information completely safe with this calculator?▼

Completely safe and secure. This calculator does NOT store, save, log, or transmit your financial information to any server. All calculations happen entirely within your web browser on your device.

Your dividend amount, foreign tax paid, personal details, and all financial information: - Stay on your device only - Are never sent to our servers or any external server - Are permanently deleted when you close the browser tab - Cannot be accessed by anyone else

Privacy Features: - No account creation required - No login or registration - No cookies or tracking - No data collection whatsoever - Completely anonymous usage

This browser-based calculation method ensures your sensitive financial information remains completely private. Use this calculator with complete confidence knowing your financial privacy is protected.

Accuracy, Compliance & Legal Information

Calculation Accuracy

✓ Based on Income Tax Act, 1961: Calculations strictly follow Indian income tax laws for foreign dividend taxation (Rule 128, Schedule FA, Form 67)
✓ DTAA Treaty Compliant: Respects Double Taxation Avoidance Agreements for accurate FTC calculations
✓ FY 2025–26 Updated: Tax slabs, surcharge rates, cess rates, and FTC rules verified for current financial year

Important Limitations

⚠ Estimation tool only: This calculator provides estimates for planning purposes. Not final tax assessment or official compliance document.
⚠ Does not address carry-forward of excess FTC: If excess FTC from prior years is available, this calculator doesn't account for it. Consult a tax professional.
⚠ No personal tax advice: This is NOT professional tax or financial advice. Consult a qualified Chartered Accountant (CA) before filing your ITR.

Before Filing ITR

→ Always verify calculated results with your dividend statements and foreign tax certificates
→ Confirm RBI exchange rate used is for the correct dividend receipt date
→ Prepare Form 67, Schedule FA, and Schedule FSI documentation before filing
→ Consult a qualified Chartered Accountant before filing your Income Tax Return (ITR-2 or ITR-3)