Non-residents

If TDS of any Non-resident is deducted or withheld by the residents as per the applicable DTAA or the Income Tax Act, non-resident can file the return of Income in India to calculate the actual tax liability.. 

It is important to note that non-residents are liable to tax in India as per the applicable slab rates. Where tax deducted exceeds the final tax calculated, refund can be claimed by non-resident

Foreign Company

Further, in case of Foreign Company, the final tax liability is not required to be equal to TDS deducted. Tax liability is calculated as per the applicable DTAAA & Income Tax Act. Accordingly, if excess has been deducted by residents while making payment to foreign Company. Foreign Company can claim the refund by filing the Income Tax return.

Therefore, filing an Income Tax return is generally recommended where tax has been deducted or DTAAA benefits are claimed.

A non-resident may opt for the more beneficial tax rate available under the applicable DTAA or the Income-tax Act, whichever is lower.