NRI TDS Rates in India for FY 2018-19 (AY 2019-20): Historical Rate Table and Section 195 Guide
A detailed reference to tax deducted at source (TDS) on payments to non-residents during financial year 2018-19, with explanations of statutory provisions, compliance, property transactions, treaty relief and the rules that must be checked for later tax years.
What is TDS on payments to non-residents?
Tax deducted at source is tax withheld by a payer and remitted to the Indian Government. Under section 195 of the Income-tax Act, 1961, a person responsible for paying a non-resident (other than a company) or a foreign company interest or another sum chargeable to tax in India generally deducts income tax at the rates in force when the amount is credited or paid, whichever is earlier, subject to statutory exceptions. It is the taxability of the sum in India, not merely the recipient's foreign address, that matters.
Financial year means the year when the income arises; assessment year is the following year in which it is assessed. FY 2018-19 corresponds to AY 2019-20. NRI is used informally here; legal residence and eligibility are determined under the relevant income-tax provisions, not nationality alone.
Historical NRI TDS rates for FY 2018-19
The following are base rates before any applicable surcharge and 4% Health and Education Cess, unless otherwise indicated. Actual withholding can depend on the payee's status, the nature of income, exemptions, treaty provisions and a valid lower-deduction certificate. Some entries are simplified statutory rates rather than an all-purpose rate for every payment.
| Payment or income category | 1961 Act provision | Historical base rate / treatment |
|---|---|---|
| Salary paid to a non-resident employee | 192 | Applicable individual slab rates, on estimated taxable salary |
| Premature taxable EPF withdrawal | 192A | 10% subject to the statutory conditions and Rs. 50,000 threshold then applicable |
| Lottery or crossword winnings | 194B | 30%; threshold generally Rs. 10,000 per winning in this period |
| Horse-race winnings | 194BB | 30%; Rs. 10,000 threshold in this period |
| Income of specified non-resident sportsperson or sports association | 194E / 115BBA | 20% |
| Payments from National Savings Scheme | 194EE | 10%; subject to Rs. 2,500 threshold and exemptions |
| Repurchase of specified mutual-fund / UTI units | 194F | 20% where the historical provision applied |
| Lottery ticket commission | 194G | 5%; Rs. 15,000 threshold |
| Specified infrastructure debt fund interest to non-resident | 194LB | 5% |
| Specified business trust distribution to non-resident: SPV interest | 194LBA(2) | 5% on qualifying interest component |
| Specified business trust distribution: rental component | 194LBA(3) | Rates in force, generally 30% for non-resident individual and 40% for foreign company, before additions |
| Investment fund distribution to non-resident unit holder | 194LBB | Rates in force; generally 30% / 40% depending on recipient |
| Securitisation trust income distribution to non-resident | 194LBC | Rates in force; generally 30% / 40% depending on recipient |
| Specified foreign-currency borrowing / bond interest | 194LC | 5% subject to eligibility and issue dates |
| Specified government securities / rupee bond interest to FII / QFI | 194LD | 5% subject to qualifying conditions |
| Other sums chargeable to tax paid to non-residents | 195 | Applicable rates in force; not one universal flat rate |
| Specified offshore fund income from units | 196B | 10% under the historical special regime |
| Specified foreign currency bonds / GDR income | 196C | 10% under the historical special regime |
| Specified FII securities income other than capital gains | 196D | 20% under the historical special regime |
Note: Section 196D, not section 194D, addresses the specified foreign institutional investor income in the last row. Section 194D relates to insurance commission. A table of statutory rates does not by itself establish that every remittance is taxable.
Section 195: investment income, gains, royalty and other payments
Section 195 is a withholding mechanism for taxable payments to non-residents. The applicable rate may be found in the annual Finance Act, the relevant charging or special-rate provisions, and an applicable Double Taxation Avoidance Agreement (DTAA). Examples of FY 2018-19 domestic-law base rates included:
| Income type | Historical reference rate | Key qualification |
|---|---|---|
| Specified NRI investment income | 20% | Section 115E, subject to Chapter XII-A conditions |
| Specified NRI long-term gains on foreign exchange assets | 10% | Section 115E and relevant asset definitions |
| Other long-term capital gains | Often 20%, or 10% for specified assets | Sections 112 and 112A; asset-specific rules |
| Qualifying listed equity / equity-oriented fund LTCG | 10% | Section 112A, with historical Rs. 1 lakh aggregate gain threshold and conditions |
| Qualifying short-term listed equity gains | 15% | Section 111A and STT-related conditions |
| Specified foreign-currency interest | 20% | Section 115A, where applicable |
| Qualifying royalty or fees for technical services | 10% | Historical section 115A provisions and agreement conditions |
| Other taxable income of non-resident individual | Applicable rates in force | Often individual slab rates; not automatically 30% |
| Other taxable income of foreign company | Generally 40% | Subject to special provisions and applicable treaty |
These historical rates must not be reused for current payments without checking amendments. In particular, capital gains rates and royalty / technical service taxation have changed since FY 2018-19.
Surcharge and Health and Education Cess in FY 2018-19
For FY 2018-19, an individual non-resident generally faced surcharge of 10% where total income exceeded Rs. 50 lakh but did not exceed Rs. 1 crore, and 15% above Rs. 1 crore. A foreign company generally faced surcharge of 2% where total income exceeded Rs. 1 crore but did not exceed Rs. 10 crore, and 5% above Rs. 10 crore. Firms generally faced 12% above Rs. 1 crore. Health and Education Cess was 4% on tax plus applicable surcharge. Marginal relief and special provisions could affect the result.
These thresholds concern total income, not simply the size of a single remittance. Surcharge and cess on a particular withholding payment depend on the statutory rates in force and treaty treatment.
DTAA relief, TRC, Form 10F and PAN
Under section 90(2) of the 1961 Act, an eligible non-resident may generally rely on a tax treaty where its provisions are more beneficial than domestic law. Documentary requirements can include a Tax Residency Certificate (TRC), Form 10F and other relevant information. Section 206AA prescribed higher withholding for failure to furnish PAN, subject to applicable exceptions, including rule 37BC for certain non-resident payments and treaty-related judicial principles. It is incorrect to assume a blanket 20% minimum in every non-PAN case.
The payer should identify the beneficial owner, income character, permanent establishment issues, treaty article and supporting documentation before deciding the rate.
TDS on purchase of Indian property from an NRI
When a buyer purchases Indian immovable property from a non-resident seller, section 195 may apply to the amount chargeable to tax in India. The commonly quoted 1% under section 194-IA applies to specified transfers by resident sellers and is not the general rule for an NRI seller. A buyer may seek an appropriate determination under section 195(2), while an eligible payee may apply for a lower or nil deduction certificate under section 197, subject to the law then in force.
Do not automatically deduct tax on the entire gross sale consideration at an assumed capital gains rate without assessing chargeability and any valid certificate. For property transactions, obtain professional advice on acquisition cost, indexation or grandfathering where applicable, treaty position and reporting.
Foreign remittance compliance: Form 15CA and 15CB
Rule 37BB under the 1961 Act prescribed information requirements for payments to non-residents. Form 15CA is the remitter's declaration and Form 15CB is a chartered accountant's certificate in cases where required. The relevant part of Form 15CA depends on the amount, chargeability, applicable order or certificate and exceptions under the rule. Not every foreign remittance requires Form 15CB. Check the procedure applicable to the payment date and the Income Tax e-Filing portal.
TDS deposit deadlines
For ordinary non-government deductors under the historical 1961 Act / Rule 30 framework, TDS deducted from April through February was generally deposited by the 7th of the following month; TDS deducted in March was generally due by 30 April. Government deductors and specified special cases could have different rules.
| Deduction period | General historical due date |
|---|---|
| April to February | 7th of the following month |
| March | 30 April |
TDS return forms and filing dates
Form 24Q covered salary TDS; Form 26Q generally covered specified non-salary resident payments; Form 27Q generally covered non-salary payments to non-residents and foreign companies. Under the historical quarterly filing schedule, due dates generally were:
| Quarter ending | Historical filing deadline |
|---|---|
| 30 June | 31 July |
| 30 September | 31 October |
| 31 December | 31 January |
| 31 March | 31 May |
These are historical compliance rules; always verify the applicable return form and notified due date for the period being filed.
Interest, late filing fees and penalties
Under section 201(1A), historical interest was generally 1% per month or part thereof for failure to deduct TDS and 1.5% per month or part thereof for tax deducted but not paid in time, subject to statutory computation rules. Under section 234E, a late TDS statement fee of Rs. 200 per day generally applied, capped at the TDS amount, with separate potential penalties under section 271H. These are legally distinct from one another.
Form 26QB concerns specified property transactions under section 194-IA involving a resident transferor. It is not the ordinary substitute for Form 27Q when purchasing property from a non-resident.
Refund of excess TDS
Where final Indian income-tax liability is less than the tax deducted, an eligible non-resident may generally claim credit and any refundable excess by filing the appropriate Indian income-tax return, subject to verification, treaty eligibility, filing rules and time limits. Check Form 26AS / the Annual Information Statement and supporting TDS certificates.
What changes for payments made in 2026?
The Income-tax Act, 2025 took effect on 1 April 2026 and introduced a revised statutory framework and terminology. The section numbers on this page are explicitly those of the Income-tax Act, 1961 for the historical FY 2018-19 period. For 2026-27 withholding, refer to the new Act, current Finance Act rates, applicable rules, transition provisions, CBDT notifications and treaty terms. The historical tables are not a substitute for a current-year rate determination.
Official legislation and resources
- Income Tax Department - laws, circulars and guidance
- Income Tax e-Filing portal - returns, forms and tax payments
- India Code - central legislation, including income-tax enactments
- e-Gazette of India - notified laws and rules
- Tax Information Network - tax information services
This article is for general legal and tax information. Historical FY 2018-19 rates are not a statement of the tax due on any particular current payment. Verify current law and obtain advice for material remittances.