Updated for the Income-tax Act, 2025 · Tax year 2026-27 (1 April 2026 – 31 March 2027)

NRO Interest Tax & DTAA Calculator

See how much tax you really owe on NRO interest, what your bank will deduct, and how much a tax treaty or a tax return can save you.

By NRI Tax Calculator editorial team · Updated

Calculate tax on your NRI account interest

Example figures, replace with yours
Rent, capital gains, etc.
Have you given your bank a Tax Residency Certificate and Form 10F?

Enter your figures and your result appears here.

Key points

  • NRE and FCNR interest is tax-free in India while you're an NRI.
  • Banks deduct 31.2% TDS on NRO interest by default.
  • With a Tax Residency Certificate and Form 10F, TDS drops to your treaty rate, e.g. 12.5% for the UAE or 15% for the US and UK.
  • If your total Indian income is low, filing a return can get all the TDS back.

How NRI bank interest is taxed

AccountTax in IndiaTDS
NRE (savings or fixed deposit)Tax-free while you are an NRINone
FCNR(B) fixed depositTax-free while you are an NRI (and while RNOR)None
NRO (savings or fixed deposit)Taxable at slab rates30% + surcharge + 4% cess = 31.2%

Banks deduct 31.2% on NRO interest even if your total Indian income is below the ₹4 lakh basic exemption. That's why so many NRIs are owed refunds.

Cutting NRO TDS with your country's tax treaty (DTAA)

India's tax treaties cap the tax on interest paid to residents of the other country. To get the treaty rate, give your bank:

  • a Tax Residency Certificate (TRC) from your country's tax authority for the relevant year,
  • Form 10F, filed online on the Indian income tax portal,
  • a self-declaration of no permanent establishment in India, and your PAN.

Treaty rates on interest (individuals)

CountryMaximum Indian tax on interest
United States15%
United Kingdom15%
United Arab Emirates12.5%
Canada15%
Australia15%
Singapore15%
New Zealand10%
Germany10%
Saudi Arabia10%
Qatar10%
Kuwait10%
Oman10%
Hong Kong10%
Japan10%
Malaysia10%
Ireland10%
Netherlands10%

Rates are for interest received by individuals under the interest article of each treaty. Some treaties allow lower rates for banks. Check the treaty text or ask your bank, as some apply cess on top in practice.

Example

Meera lives in Dubai and earns ₹2 lakh of NRO FD interest. She has no other Indian income.

  • Default TDS: ₹2 lakh × 31.2% = ₹62,400
  • With a UAE TRC and Form 10F: ₹2 lakh × 12.5% = ₹25,000
  • Actual tax: her income is below ₹4 lakh, so it's nil. Filing an Indian return gets back whatever TDS was deducted.
Don't forget your home country. The US, UK, Canada and Australia tax residents on worldwide income, including NRE interest that's tax-free in India. Report it there and claim credit for any Indian tax paid.

Frequently asked questions

Is NRE interest taxable in India?
No. Interest on NRE accounts is tax-free in India while you're a non-resident under FEMA. It may still be taxable in your country of residence.
What is the TDS on NRO interest?
30% plus 4% cess (31.2%), plus surcharge if the interest is above ₹50 lakh. It's deducted regardless of your total income unless you claim a treaty rate or get a lower-deduction certificate.
Can NRIs submit Form 15G or 15H to avoid TDS?
No. Form 15G and 15H, now replaced by a declaration under section 393(6), are for residents only. NRIs need to use the treaty rate or a lower-deduction certificate (Form 128).
How do I get back excess TDS on NRO interest?
File an Indian income tax return (usually ITR-2) for the tax year. The excess TDS is refunded to your Indian bank account, usually within a few weeks of processing.
Is FCNR interest taxable after I return to India?
FCNR interest stays tax-free while you're RNOR. Once you become ROR it becomes taxable.
What is the DTAA rate for interest for NRIs in the UAE?
Under the India-UAE treaty, Indian tax on interest is capped at 12.5% of the gross amount for individuals (5% where a bank is the beneficial owner).
Selling property or owed a refund?

A chartered accountant who works with NRIs can get a lower-TDS certificate, file your return and handle repatriation paperwork.

Sources

Important: This calculator gives an estimate based on the Income-tax Act, 2025 as we understand it on 25 October 2026. It doesn't replace advice from a chartered accountant. See our disclaimer.