International TaxFY 2026-27 (AY 2027-28)
Royalty Tax Calculator
TDS on royalty payments — 10% u/s 194J for residents, 20% u/s 115A (or DTAA rate) for non-residents.
Payment details
Recipient
TDS / withholding
₹1,04,000
Sec 115A r.w. Sec 195 — Royalty to non-resident (DTAA applied) · 10.0%
Gross payment
₹10,00,000
Tax rate
10.0%
Base tax
₹1,00,000
Cess (4%)
₹4,000
Total withholding
₹1,04,000
Net to recipient
₹8,96,000
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Sec 115A: Royalty / FTS to non-resident → 20% (Finance Act 2023; effective from AY 2024-25). DTAA may provide a lower rate. Sec 194J: 10% TDS on royalty paid to resident. Surcharge applies if NR income exceeds slabs; cess @ 4% always.
FAQs
Frequently asked questions
When is DTAA rate applicable?+
DTAA rate applies when (a) recipient furnishes Tax Residency Certificate (TRC) and Form 10F, (b) recipient has no PE in India, and (c) the DTAA explicitly covers royalty / FTS. Most India treaties have 10-15% royalty cap.
Difference between Sec 194J and 115A?+
194J is the TDS section — applies on payments to residents at 10%. 115A is the substantive tax provision — fixes the actual tax rate for non-residents (20%). For NR, TDS u/s 195 deducts at the substantive rate (20% or DTAA, whichever is lower).
Is software royalty taxable?+
Per the SC Engineering Analysis Centre (2021) ruling, payments for shrink-wrapped / off-the-shelf software are NOT royalty — they are business income, taxable only if there's a PE. CBDT has accepted this; old TDS demands have largely been dropped.
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