Withholding Tax Under Income Tax Act 2025#
Withholding Tax Overview#
Withholding tax is the tax deducted at source on certain payments to non-residents or specified circumstances.
Key Withholding Tax Sections#
| Section | Type of Payment | Rate |
|---|---|---|
| Section 21 | Non-resident payments | As per treaty |
| Section 22 | Foreign technical services | 10% |
| Section 23 | Royalty | 10% |
| Section 24 | Dividend | 10% |
| Section 25 | Interest | 10% |
When Withholding applies#
- Payment to non-resident
- Payment to foreign company
- Specific categories as per Act
Compliance Requirements#
- TAN registration
- Quarterly returns
- Annual certificate
- TDS certificate generation
Double Taxation Avoidance#
- Benefits under DTAA
- Lower withholding rates
- Treaty benefits claim