If you’re an NRI based in Saudi Arabia with investments, property, or bank accounts back in India, you’ve probably wondered how much of that income actually needs to be taxed twice. The good news is that it usually doesn’t have to be. The Double Taxation Avoidance Agreement (DTAA) between India and Saudi Arabia exists for exactly this reason, and at Corprights, we’ve helped a fair number of clients in the Kingdom bring down or fully eliminate their Indian tax liability on capital gains, interest, and dividend income, simply by getting the paperwork right. This guide walks through what the DTAA covers, the exemptions available to you, and how to get your Tax Residency Certificate (TRC) in place to actually claim them.
In simple terms, the India–Saudi Arabia DTAA is a treaty designed to stop the same income from being taxed twice. Since Saudi Arabia doesn’t levy personal income tax, NRIs living there are typically only taxed in India, and only on income that originates from India. Depending on the type of income and the documents you have on hand, the DTAA either reduces that Indian tax to a concessional rate or removes it altogether.
Not every NRI automatically gets these benefits. You need to be a recognized tax resident of Saudi Arabia, which means obtaining a Tax Residency Certificate (TRC) from the Saudi Zakat, Tax, and Customs Authority (ZATCA). Without this document, banks and mutual funds in India have no basis to apply the treaty rate, and they’ll default to standard withholding.
This is often the benefit clients are most surprised by. Under the DTAA, an NRI who is a genuine tax resident of Saudi Arabia generally doesn’t owe Indian tax on capital gains from selling Indian mutual fund units, whether equity or debt funds. This has become even more relevant given recent shifts in how capital gains are taxed in India domestically, making proper DTAA documentation more valuable than ever for anyone redeeming sizeable holdings.
Interest from NRO fixed deposits or savings accounts is taxable in India, but the DTAA usually caps the rate at around 10 percent rather than the higher domestic rate, subject to your residency status being properly established. On the other hand, interest from NRE and FCNR accounts stays tax-free in India altogether, as long as you qualify as a non-resident under Indian tax law. This one isn’t strictly a DTAA benefit; it comes from Indian domestic tax rules, but it’s worth knowing as part of your overall picture.
Dividends from Indian companies or mutual funds are normally taxed at 20 percent in India. With the right documentation in place, Saudi tax residents can bring that down to 5 percent under the treaty, which adds up meaningfully if you hold a diversified Indian portfolio.
Before the financial year closes, or before you make a transaction, you’ll need to submit the following to the relevant mutual fund, bank, or income payer in India: • A valid Tax Residency Certificate (TRC) issued by the Saudi tax authority • A duly filled and signed Form 10F • A self-declaration confirming you have no permanent establishment (PE) in India and that you’re the beneficial owner of the income
ZATCA runs this process entirely online, so you can handle it yourself without much hassle. Here’s what it looks like in practice.
A practical note we share with most clients: Saudi Arabia typically only issues a TRC for a financial year that has already ended. So during FY 2025–26, you’ll generally only be able to get a TRC covering FY 2024–25. Indian mutual funds and institutions sometimes ask for a current-year TRC anyway, which creates a timing mismatch. When that happens, the workaround is to submit whatever TRC you currently have along with a declaration that the current year’s certificate will follow once ZATCA issues it, plus Form 10F for the current year.
• Saudi-based NRIs can be exempt from capital gains tax on Indian mutual funds, and can access reduced rates on dividends and interest under the DTAA. • Claiming these benefits requires three things: a valid TRC, Form 10F, and a self-declaration. • TRCs are applied for entirely online through ZATCA and are usually issued only for the prior financial year. • Getting your documentation in order early, rather than scrambling at redemption or remittance time, is what actually saves you money and avoids unnecessary TDS deductions in India.
If you hold investments, property income, or bank accounts in India, our advice is simple: start your tax planning early each financial year, keep your TRC and Form 10F current, and bring in a professional if compliance or repatriation gets complicated. That’s exactly where our team comes in. For personalized help applying for a TRC, preparing Form 10F, or claiming DTAA-based exemptions, reach out to us at Corprights Management Consultants through https://corprights.sa/ or email caashique@corprights.sa.
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It depends on how long you stayed in India during the financial year. If you were in India for fewer than 182 days, your Saudi income is generally not taxable in India. However, if you stayed for 182 days or more, you are treated as an Indian tax resident, and your global income, including what you earn in Saudi Arabia, becomes taxable in India. Tax rates for residents range from 5% to 30% depending on your income level.
You can apply for a TRC online through the Zakat, Tax and Customs Authority (ZATCA) portal at https://login.zatca.gov.sa/irj/portal?ume.logon.locale=en&login=angular
Steps to apply:
Eligibility: Individuals must either reside in Saudi Arabia for at least 183 days in a tax year, or have a permanent residence in Saudi Arabia and have stayed there for at least 30 days. Companies must either be incorporated under Saudi law, or have their management and control effectively exercised within the Kingdom.
A Double Taxation Avoidance Agreement (DTAA) is a tax treaty signed between India and more than 100 countries to ensure that NRIs and other taxpayers are not taxed twice on the same income. Under a DTAA, income is either taxed in only one country or taxed at a reduced rate in both, depending on the terms of the specific agreement. India has signed DTAAs with countries including Saudi Arabia, the US, the UK, the UAE, Canada, and Singapore, among others.
For personal income, yes. Unlike most countries, Saudi Arabia does not impose any tax on personal income, and this applies to both residents and non-residents. There is no inheritance tax, gift tax, or stamp duty either. For these reasons, many expats working in Saudi Arabia effectively pay no personal income tax there, though their Indian tax obligations depend on their residency status in India.
Withholding tax in Saudi Arabia applies to non-residents who earn income from Saudi sources by providing services. The rates range from 5% to 20% depending on the type of payment involved, such as royalties, dividends, management fees, or consulting fees.
Not automatically, no. If your Saudi subsidiary is set up as a MISA-licensed company, a 100% foreign-owned entity registered through Saudi Arabia's Ministry of Investment, it is treated as a separate Saudi legal entity, fully distinct from your Indian parent company. Profits earned by the Saudi subsidiary are taxed where they are earned, in Saudi Arabia at a 20% corporate income tax rate on the foreign-owned share of profits, and are not automatically added to your Indian company's taxable income. This separation is supported by the India-Saudi Arabia DTAA, which prevents business profits from being pulled into both countries' tax nets simultaneously.
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