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HMRC internal manual

Double Taxation Relief Manual

India: Treaty Summary

The table summarises the provisions of the treaty as they relate to income beneficially owned by UK residents. The rate shown is the ‘treaty rate’ and does not reflect taxes chargeable under domestic law before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which India is permitted to tax income in the relevant categories under the treaty. Rates chargeable under domestic law may be higher or lower.

In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty itself should be consulted for the full details. The text of the treaty can be found on gov.uk.

Portfolio dividends 10% Article 11
     
Dividends on direct investments 10% Article 11
Conditions for lower rate on dividends on direct investments Not applicable  
Property income dividends 15% Article 11
Interest 15% (Notes 1 and 2) Article 12
Royalties 15% (Note 3) Article 13
Fees for technical services 15% (Note 4) Article 13
Government pensions Government pensions taxable only in India for services rendered to India Article 19
Other pensions Taxable only in the UK Article 20
Arbitration No  

Note 1: Interest arising in India and beneficially owned by a UK resident bank carrying on a bona fide banking business is taxable in India at a reduced rate of 10%.

Note 2: The following interest is exempt from tax in India:

  1. interest paid to the UK government or a political subdivision or local authority thereof; and
  2. interest beneficially owned by a UK resident and paid in respect of a loan made, guaranteed or insured, or any other debt-claim or credit guaranteed or insured by the United Kingdom Export Credits Guarantee Department (now UK Export Finance).

Note 3: A reduced rate of 10% applies to payments of any kind received as consideration for the use of, or the right to use, any industrial, commercial or scientific equipment (i.e. equipment leasing payments), other than income derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic.

Note 4: A reduced rate of 10% applies to fees that are ancillary and subsidiary to the enjoyment of leased property