No DTAA currently exists, though one is reportedly under negotiation
No Double Taxation Avoidance Agreement currently exists between India and Nigeria. The High Commission
of India, Abuja's own bilateral economic relations page states an Economic Cooperation Agreement dating to
1983 exists, with an updated draft of that agreement and a DTAA described as under negotiation -- not yet
signed or in force. This platform explicitly debunks a circulating secondary claim of a “7.5%
India-Nigeria DTAA interest rate” as false, since no treaty exists to set any such rate, and
recommends checking the High Commission's own page periodically for updates on negotiation status.
How income is taxed in the absence of a treaty
In the absence of a treaty, standard Indian withholding rates apply without treaty mitigation to an
NRI's India-source income connected to Nigeria -- Section 195 TDS applies at the rates set by the Income
Tax Act, with no treaty-based reduced rate available. On the Nigerian side, relief for India-source income
taxed twice is generally sought through Nigeria's own domestic foreign tax credit mechanism against
Nigerian tax liability, rather than through bilateral treaty relief. Nigeria's standard non-treaty
withholding rates are commonly cited at 10% on dividends, 10% on interest, and 5% on royalties -- these
apply by default to India-linked payments.
Practical filing points for an NRI connected to Nigeria
Because no treaty exists, an NRI connected to Nigeria cannot claim treaty-based relief under Sections
90/90A of the Income Tax Act on India-source income -- Section 91 unilateral relief is commonly
misunderstood here and generally applies to Indian residents who paid foreign tax in a non-treaty country,
not directly to an NRI's India-source income while resident in Nigeria. Form 15CA (and Form 15CB where
applicable) is still required before remittance abroad.
Common mistakes in this area for NRIs connected to Nigeria:
- Relying on the circulating false claim of a specific India-Nigeria DTAA withholding rate, when no
treaty exists at all.
- Assuming Section 91 unilateral relief applies the same way it would for an Indian resident, rather
than understanding its actual scope.
- Not checking periodically for DTAA negotiation progress, since one is reportedly in the works.
