An India-Bangladesh DTAA exists and reportedly caps dividends at 10% or 15%, interest at 10%, and royalties at 10% -- this platform flags that it could not fully reconcile the treaty's exact signing and entry-into-force dates from available secondary sources, and that the treaty appears to contain no separate Fees for Technical Services article and no MFN clause.
The India-Bangladesh DTAA -- reported rates, with an explicitly flagged date gap
An India-Bangladesh Double Taxation Avoidance Agreement exists and is commonly cited as dating to the
early 1990s, though this platform's research found an internally inconsistent date pairing across the
secondary sources it reviewed and could not reach the Income Tax Department's own primary treaty page to
resolve it -- readers should confirm the exact signing and entry-into-force dates directly against the
Department's published treaty text before relying on them for a specific transaction, rather than relying
on any single date cited elsewhere. Per the treaty text reviewed via a secondary tax-publisher source,
dividends are capped at 10% where the beneficial owner is a company holding at least 10% of capital, or
15% otherwise; interest is capped at 10% of the gross amount, with exemptions for specified government
and central-bank entities; and royalties are capped at 10%. This platform flags two gaps: the treaty
does not appear to contain a separate article or rate for Fees for Technical Services, and it does not
appear to carry a Most-Favoured-Nation clause (unlike some of India's other treaties, such as those with
Belgium, the Netherlands, France, and Switzerland) -- both should be confirmed directly with a chartered
accountant for any transaction where they might matter.
TDS under Section 195, and getting a lower or nil TDS certificate
Section 194-IA's 1% TDS applies only to resident sellers. For a non-resident seller, the buyer must
instead deduct TDS under Section 195, generally on the full sale consideration at the capital-gains rate
unless a lower-deduction certificate has been obtained. An NRI seller connected to Bangladesh can apply to
the jurisdictional Assessing Officer, via Form 13 under Section 197, for a certificate authorizing TDS at
a lower or nil rate based on the actual computed gain -- worth evaluating with a chartered accountant
before the sale closes.
Repatriation of funds via FEMA
Net proceeds from an Indian property sale are typically credited to the NRI's NRO account in India.
FEMA rules permit repatriation abroad of up to USD 1 million (or equivalent) per financial year,
cumulative across eligible remittances from that account, subject to the authorized dealer bank receiving
Form 15CA (and Form 15CB where applicable). Where an inheritance connected to Bangladesh involves property
that was ever subject to the Vested Property Act history discussed in this platform's Property guide, any
proceeds question becomes substantially more complex and should be handled with specialized counsel on
both sides of the border before repatriation is even considered.
Common mistakes in this process:
- Relying on a specific India-Bangladesh DTAA signing date without confirming it against the Income
Tax Department's own published treaty text, given the date inconsistency this platform's research
encountered.
- Assuming an FTS-specific treaty rate or MFN treatment applies -- this platform found no evidence
of either in this treaty.
- Not applying for the Section 197 lower-deduction certificate before a property sale closes.
