NRI Working Abroad? India May Tax Your 10% Fees

If you're an NRI living abroad but earning from Indian clients, India can still tax that income. But tax treaties with countries like Brazil can cap what India charges — here's what you need to know.

Here's what happened: India can tax professional income earned by NRIs if the payment originates from an Indian company or client, regardless of where the NRI physically works.. The India-Brazil Double Taxation Avoidance Agreement caps Indian withholding tax on professional fees at 10% of gross fees, not the standard 30%+ rate.. Indian companies paying foreign professionals must deduct TDS at applicable treaty rates before transferring fees — non-compliance creates liability for the payer..

What you should do: Check if your country of residence has a DTAA with India — visit the Income Tax India portal and search 'list of DTAAs' to confirm treaty benefits and applicable rates.. Ask your Indian client to apply the lower treaty withholding rate and provide a Tax Residency Certificate (TRC) from your country's tax authority — this is mandatory to claim DTAA benefits.. File your Indian non-resident tax return (ITR-2 or ITR-3) to claim a refund if excess TDS was deducted, and claim a Foreign Tax Credit in your home country to avoid paying tax twice..

Your Indian client cannot apply the lower DTAA rate unless you give them a Tax Residency Certificate. Without it, they must deduct TDS at the default higher rate — get your TRC before billing.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.