How does a DTAA reduce TDS on a payment to a non-resident?

Question

tdsguru.in (CA firm) · Accepted Answer

A DTAA often caps the rate on interest, royalty or technical fees below the Act's rate; to apply it, the non-resident must give a Tax Residency Certificate, Form 10F and a no-PE declaration. Where India has a DTAA with the payee's country, the treaty rate (for example, a capped 10–15% on royalty or interest) applies if it is more beneficial than the Act's rate. To claim the treaty rate, obtain from the non-resident a valid Tax Residency Certificate (TRC), Form 10F, and a declaration of no permanent establishment in India. Without these, the higher domestic rate (and possibly 20% for no PAN) applies.