Taxation of Non-Resident Companies and Individuals in India: Complete Guide to Income Tax, DTAA, and Repatriation 

India offers a growing market and attractive investment opportunities for global companies and non-resident individuals. However, understanding Indian tax laws is essential for ensuring compliance and avoiding unnecessary liabilities. Whether you’re a foreign corporation setting up operations or a non-resident individual earning income from India, strategic tax planning is critical. 

At Jain Prachi & Company, we help foreign entities and non-residents navigate Indian tax regulations with clarity and confidence. From optimizing your tax liability to facilitating profit repatriation and DTAA benefits, our tax experts ensure smooth operations in India. 

Who Is Considered a Non-Resident Under Indian Tax Law? 

Under the Indian Income Tax Act, 1961: 

• A company is treated as non-resident if it is not incorporated in India and its place of effective management lies outside India. 

• An individual is considered non-resident if they do not meet the criteria of physical presence in India for 182 days or more during a financial year. 

Non-residents are taxed only on the income that is earned, received, or deemed to be received in India. 

Taxation of Foreign Companies Operating in India 

Foreign companies are liable to pay tax in India on income arising or accruing in India, including: 

• Business income from operations in India 

• Royalties and technical service fees 

• Interest and dividend income 

• Capital gains from sale of assets situated in India 

Corporate Tax Rates for Foreign Companies (AY 2024–25): 

Note: Tax rates may be reduced under a Double Taxation Avoidance Agreement (DTAA). 

Taxation of Non-Resident Individuals (NRIs) 

Non-resident individuals earning income from India are liable to tax only on such Indian-sourced income, including: 

• Rental income from property in India 

• Interest income from Indian bank accounts, NRO deposits 

• Dividends and capital gains from Indian securities 

• Business or professional income sourced from India 

NRIs enjoy certain exemptions and special provisions under Chapter XII-A of the Income Tax Act, such as: 

• Concessional tax rates on specific investment income 

• No deduction allowed under standard exemptions (like 80C) for NRI special incomes 

Double Taxation Avoidance Agreement (DTAA) 

India has signed DTAAs with over 90 countries to avoid double taxation and facilitate cross-border investments. If you are a resident of a DTAA partner country, you may be able to claim: 

• Reduced withholding tax rates on dividends, interest, royalties, and fees 

• Credit for foreign taxes paid 

• Exemption from taxation in India (on certain types of income) 

To claim DTAA benefits, foreign taxpayers must: 

• Obtain a Tax Residency Certificate (TRC) from their home country 

• File Form 10F and self-declaration with Indian income tax authorities 

Repatriation of Funds from India 

Foreign companies and NRIs can repatriate funds from India, subject to FEMA guidelines and applicable tax clearance. 

Repatriation Options Include: 

• Dividends paid by Indian companies (after DDT abolition, taxed in recipient’s hands) 

• Capital gains after tax payment 

• Sale proceeds from property or shares (with TDS compliance) 

• Interest from NRO deposits and savings accounts 

All repatriation must be routed through authorized dealers (banks) with proper documentation, including tax payment proof and auditor certification (Form 15CB/15CA). 

How Jain Prachi & Company Assists Non-Residents and Foreign Companies 

• Tax registration (PAN/TAN) for non-residents 

• Strategic tax planning and compliance for NRIs and foreign companies 

• DTAA benefit claims and documentation (TRC, Form 10F, Form 10FA/FB) 

• Filing of income tax returns and obtaining tax clearance certificates 

• Certification of remittances (Form 15CA/CB) 

• Representation before Indian tax authorities 

Why Choose Jain Prachi & Company? 

• Deep experience in international taxation and FEMA compliance 

• End-to-end support for NRIs, foreign companies, and global investors 

• Tailored tax strategies to reduce effective tax rates 

• Transparent pricing with no hidden charges 

Start Tax Planning with Confidence – Contact Us Today 

At Jain Prachi & Company, we simplify Indian taxation for non-residents and international investors. Let us help you minimize tax exposure and ensure full compliance with Indian laws. 

📧 Email: contactus@jainprachi.com 
🌐 Website: https://jainprachi.com 

Book a consultation to discuss your tax concerns in India today. 

FAQs – Non-Resident and Foreign Company Taxation 

Q: Can a foreign company be taxed in India even if it doesn’t have a physical presence? 
Yes, if the income arises from Indian sources or services rendered in India, it can be taxed, even without a physical office. 

Q: Are NRIs required to file income tax returns in India? 
Yes, if their Indian income exceeds the basic exemption limit (₹2.5 lakh as of AY 2024–25). 

Q: What documents are required to repatriate funds from India? 
Typically, Form 15CA/CB, PAN, TRC (if applicable), and proof of tax payment.