DTAA Rate by Country: US RSU, UK Pension, UAE Salary — Article Number and Form 10F
The India-US DTAA taxes dividends at 15% or 25% under Article 10 and royalties at 15% under Article 12, while RSU vest income generally falls under Article 15 salaries and India-UK pensions under Article 17. To claim treaty benefits you must file Form 10F and provide a Tax Residency Certificate.
Harun Raaj
Chartered Accountant · Harun Raaj & Associates
The DTAA article you rely on decides whether India can tax you — and at what rate — and you cannot claim any treaty benefit without a Tax Residency Certificate (TRC) and Form 10F. For US RSU income, the India-US treaty pulls it under Article 15 (salaries), taxable in the country of residence. India-UK pensions fall under Article 17 and are taxable only in the state of residence. UAE salary of an NRI is taxable only in the UAE under Article 15 — India has no right to tax it.
DTAA Rate Table by Country and Income Type
The treaty does not create new income — it caps how much India can tax and which country gets first right. If the domestic rate is lower than the treaty rate, domestic law applies; if the treaty rate is lower, the treaty wins (s.90 override).
US RSUs: Article 15, Taxable in India if Resident
RSU vest income is employment income. Under Article 15 of the India-US DTAA, salary, wages and other remuneration are taxable only in the country of residence unless the employment is exercised in the other country. So:
- If you are an Indian resident (ROR), RSU perquisite on vest is taxable in India regardless of where the work was done.
- If you are an NRI, the perquisite is taxable in India only to the extent services were rendered in India (source-based under s.9(1)(ii)).
- US federal tax withheld at vest (typically 22% supplemental rate) is recovered via a foreign tax credit — file Form 67 under Rule 128 before the ITR.
Worked Example: Rahul's US RSU
Rahul, an Indian resident, has 100 RSUs vest on 15 September 2025. FMV at vest: USD 50. Exchange rate: ₹83/USD.
- Perquisite = 100 × $50 × ₹83 = ₹4,15,000 — taxable in India as salary (Art 15).
- US withheld 22%: $1,100 × ₹83 = ₹91,300.
- Indian tax at 30% marginal rate on ₹4,15,000 = ₹1,24,500.
- Foreign tax credit (Form 67): min(₹91,300, ₹1,24,500) = ₹91,300.
- Net India tax payable = ₹1,24,500 − ₹91,300 = ₹33,200.
UK Pensions: Article 17, Taxable in State of Residence
Under Article 17 of the India-UK DTAA, pensions (including state pensions) and similar remuneration are taxable only in the state of residence. Two outcomes:
- Meera lives in the UK (NRI): her UK state pension of £6,000/yr (≈₹6,36,000 at ₹106/£) is taxable only in the UK. India has no right to tax it.
- Meera returns to India and becomes resident: the same pension becomes taxable only in India (as income from other sources), with credit for any UK tax she pays.
The residence flip — not the pension's source — determines where it is taxed. This is why Meera's TRC is the single document that governs the outcome.
UAE Salary: Article 15, Taxable Only in the UAE
The India-UAE DTAA Article 15 follows the same residence principle. For Farhan, an NRI working in Dubai, his salary is taxable only in the UAE. Since the UAE levies no personal income tax, the practical result is that his UAE salary escapes Indian tax entirely — provided he is genuinely resident in the UAE for treaty purposes and not merely a frequent visitor.
The trap: if Farhan spends enough days in India to become an Indian resident (the 60-day/120-day tests in s.6(1)), Article 15 flips the taxing right to India. And under s.6(1A) he may be deemed resident on Indian-source income above ₹15 lakh even with no India stay — though his UAE salary remains outside Indian tax because it is foreign-source income of a deemed resident.
Form 10F and the TRC: The Two Mandatory Documents
To claim a treaty benefit you must have:
- Tax Residency Certificate (TRC) — issued by the tax authority of the country you claim to be resident in (IRS, HMRC, UAE Ministry of Finance, etc.), for the relevant financial year.
- Form 10F — the declaration filed on the Indian income-tax portal that provides the prescribed particulars (residence status, PAN, country code, etc.).
Changed FY 2025-26: Form 10F is now mandatory for every treaty-benefit claim from 1 April 2025 — it is no longer optional where the TRC already contains all prescribed particulars. File Form 10F in the return before claiming a lower treaty rate; without it, the Indian rate applies.
Practical points:
- Form 10F is filed electronically on the e-filing portal (Income Tax Forms → Form 10F) and referenced in the ITR.
- The TRC must be for the same year as the income.
- Keep both for six years — they are the first documents requested in a DTAA-related scrutiny.
FAQ
Q1: What is the India-US DTAA rate on dividends?
15% where the beneficial owner is a company that holds at least 10% of the voting power; 25% in all other cases (Article 10). For most individual NRIs holding portfolio stock, the 25% rate applies.
Q2: How is RSU vest income taxed under the India-US DTAA?
As employment income under Article 15. If you are an Indian resident, the perquisite is taxable in India; if you are an NRI, only the services-rendered-in-India portion is taxable. US tax withheld is creditable via Form 67 (Rule 128).
Q3: Are UK pensions taxable in India for an NRI living in the UK?
No. Under Article 17 of the India-UK DTAA, pensions are taxable only in the state of residence — the UK. India has no right to tax them while you remain a UK resident. If you return to India and become resident, the pension becomes taxable in India.
Q4: Is a UAE salary taxable in India for an NRI in Dubai?
No. Under Article 15 of the India-UAE DTAA, salary is taxable only in the UAE, which levies no income tax. The position changes only if you become an Indian resident through the day-count tests.
Q5: What documents do I need to claim a DTAA benefit?
A Tax Residency Certificate from your country of residence for the relevant year, and a Form 10F filed on the Indian income-tax portal. From 1 April 2025, Form 10F is mandatory for treaty-benefit claims.
Q6: What happens if I claim a treaty rate without Form 10F?
The tax authority can deny the treaty rate and apply the domestic rate, with interest. The claim is disallowed until the compliance is complete — file Form 10F in the return from the outset.
Q7: If the Indian rate is lower than the DTAA rate, which applies?
The lower effective rate applies. The DTAA caps India's right to tax; if the domestic rate is already lower, the domestic rate governs. Treaty benefits never increase your tax.
Use our DTAA Rate Lookup to find the applicable article and rate for your income type and country.
Sources
- India-US Double Taxation Avoidance Agreement, 1989 (as amended) — Articles 10, 11, 12, 15, 21.
- India-UK Double Taxation Avoidance Agreement — Article 17 (pensions).
- India-UAE Double Taxation Avoidance Agreement — Article 15 (dependent personal services).
- Sections 90 and 90A, Income-tax Act 1961 — treaty override and conditions (TRC).
- Rule 21AB and Form 10F, Income-tax Rules 1962; CBDT notification mandating Form 10F w.e.f. 1 April 2025.
Treaty rates save real money, but only when Form 10F and the TRC are in place before the ITR is filed. Book a consultation at harunraaj.com.
---
See Also
Go deeper with our hub guides
Statute-cited, section-by-section guides covering the same ground this article does.
Need help with this?
Our team handles the paperwork. You focus on your business.