Q&A on Asian Bus.

This is the place that our Editors will reply to your various questions about doing business in Asia.
Please utilize it as a solution to the issues you have doing your daily business across Asia.

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Are profits derived from investments in India taxable; and are the taxes, if any, deductable at source?

  • FAQ: INDIA
  • Date: 15.07.2010

Income by way of dividends, interest, royalties and fees for technical services earned by a non-Indian company in India, will be taxed in India at special rates. Dividends declared by a non-Indian company out of the after-tax profits of an Indian branch which have been remitted to the home country, are not liable to tax in India. Profits earned by the Indian branch of a non-Indian company are taxable in India.

Tax is deducted at source from payments made to a non-resident or a foreign company in respect of any interest (except interest on securities) or any other amount (other than salary) at the time when the payment is made (sec 195 of the  Income Tax Act ).

For more details, see Asia Business Guide , [IND ¶35-201] Taxes on investment profits; and [IND ¶35-212] Must tax be deducted from investment profits?