Tax is required to be deducted at source from payments made to non-residents and foreign companies at appropriate rates, as specified under the domestic tax law or tax treaty, whichever is lower. Rates of withholding tax from payments to Non-Residents under the domestic tax laws are as follows:
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Type of payment Rate (%)
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Interest 20
Dividends 20
Royalties 30
Technical service fees 30
Other taxable income 55*
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* Withholding taxed is charged on estimated income,
as approved by the tax authorities.
Centre for Monitoring Indian Economy, Bombay
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Last updated: May 1995.