India Singapore DTAA for Companies in 2026 with Rates, LOB and PPT

Written by CA Nandini, Krystal7 Consultants. Last updated 1 October 2026.

The India Singapore DTAA caps Indian tax on dividends at 10 percent for a Singapore company owning at least 25 percent of the shares. Other dividends bear up to 15 percent. Interest is capped at 15 percent, or 10 percent for banks. Royalties and technical fees are capped at 10 percent, and a fee is taxable only if the service makes technology available. India taxes gains on shares acquired from 1 Apr 2017. Each claim needs a residency certificate and Form 41 under section 159(8) of the Income Tax Act, 2025.

This page covers the treaty rates, technical fees, capital gains, Article 24A, the MLI principal purpose test, permanent establishment, documents and substance. It ends with a worked example, a checklist and 16 FAQs. Rupee amounts use Indian grouping: INR 1,00,00,000 is one crore.

What does the India Singapore DTAA cover?

The India Singapore Double Taxation Avoidance Agreement (DTAA) is the income tax treaty the two countries signed on 24 Jan 1994. India notified it by GSR 610(E) of 8 Aug 1994. It decides which country may tax a Singapore company's Indian income. It also caps India's rate on dividends, interest, royalties and technical fees.

Article 2 covers Indian income tax "including any surcharge thereon" and Singapore income tax. A company resident in both countries is resident where its place of effective management is, under Article 4(3). Three protocols and the Multilateral Instrument (MLI) have amended the treaty.

Instrument	Dates	What it did
Agreement, GSR 610(E)	Signed 24 Jan 1994; in force 27 May 1994	Original treaty
First protocol, S.O. 1022(E)	Signed 29 Jun 2005; in force 1 Aug 2005	10% cap on royalties and technical fees in Article 12(2); limitation of benefits clause for capital gains
Second protocol, S.O. 2031(E)	Signed 24 Jun 2011; in force 1 Sep 2011	New Article 28 on exchange of information
Third protocol, S.O. 935(E)	Signed 30 Dec 2016; in force 27 Feb 2017	Source taxation of share gains in Article 13; Article 24A; Article 9(2); Article 28A
MLI	Signed 7 Jun 2017; in force for Singapore 1 Apr 2019 and India 1 Oct 2019	New preamble and principal purpose test, effective for Indian taxes from 1 Apr 2020

From 1 Apr 2026, section 159 of the Income Tax Act, 2025 gives effect to the treaty. It replaced section 90 of the 1961 Act. Under section 159(4), the Act applies only where it is more beneficial to the taxpayer. Section 159(6) still applies the General Anti Avoidance Rule (GAAR) in Chapter XI. Article 28A of the treaty preserves domestic anti avoidance rules.

Article 23 lets each country tax income the treaty does not mention under its own law. So a payment outside the named articles gets no treaty cap in India. We test unusual payments, such as a guarantee commission, against Article 23 before assuming a cap.

If the Indian company is not yet set up, start with our Singapore to India company registration guide.

What are the India Singapore DTAA withholding rates?

The treaty caps India's tax on dividends at 10 percent for a company owning at least 25 percent of the shares, and 15 percent otherwise. Interest is capped at 10 percent for a bank or similar financial institution and 15 percent for other lenders. Royalties and fees for technical services are capped at 10 percent. Each cap needs the Singapore company to be the beneficial owner.

Income from India	Article	Treaty cap	Condition	Domestic rate for a foreign company, tax year 2026-27 (before surcharge and cess)
Dividends	10(2)(a)	10%	Beneficial owner is a company owning at least 25% of the shares	20%, section 207(1)
Dividends	10(2)(b)	15%	All other cases	20%, section 207(1)
Interest on a loan from a bank or similar financial institution, including an insurer	11(2)(a)	10%	Beneficial owner	20% on foreign currency loans; 35% on rupee loans
Interest from other lenders, such as a parent	11(2)(b)	15%	Beneficial owner	20% on foreign currency loans; 35% on rupee loans
Royalties	12(2)	10%	Beneficial owner	20%, section 207(2)
Fees for technical services	12(2), 12(4)	10%	Ancillary to a royalty, makes technology available, or transfers a technical plan or design	20%, section 207(2)
Other service fees	7	Nil without a PE	No permanent establishment in India	Depends on section 9
Gains on shares acquired before 1 Apr 2017	13(4A)	Taxable only in Singapore	Article 24A	12.5% long term, 35% short term (unlisted)
Gains on shares acquired from 1 Apr 2017	13(4B)	No cap	None	12.5% long term, 35% short term (unlisted)
Income not dealt with elsewhere	23	No cap	Domestic law applies	Rate in force

Sources: India Singapore DTAA; sections 197 and 207 of the Income Tax Act, 2025; Finance Act, 2026, First Schedule.

The Indian payer deducts under section 393(2), Table serial 17, at the "rates in force". That is the Finance Act rate or the treaty rate, as applicable. A payer holding the treaty documents deducts at the lower treaty rate. Our guide to TDS on payments to non residents covers the mechanics.

Domestic rate against treaty rate

Domestic rates carry surcharge and 4 percent Health and Education Cess. A foreign company's surcharge is 2 percent above INR 1,00,00,000 of income paid or likely to be paid in the year. It is 5 percent above INR 10,00,00,000. Add up dividends, interest, royalties and fees to one payee before you pick the slab.

Payment to a Singapore company	Domestic base rate	Effective rate in the 2% surcharge slab	Treaty rate we apply
Dividend, 25% or more holding	20%	21.216%	10%
Interest on a foreign currency loan from the parent	20%	21.216%	15%
Interest on a rupee loan from the parent	35%	37.128%	15%
Royalty	20%	21.216%	10%
Fee for technical services	20%	21.216%	10%
Long term gain on unlisted shares acquired from 1 Apr 2017	12.5%	13.26%	No treaty cap

We apply the treaty rate flat, without surcharge or cess. Article 2 names Indian income tax "including any surcharge thereon" as a covered tax. Tribunal rulings treat cess the same way, but no CBDT circular settles the point. So Form 146 should state the article and the flat rate.

Rupee interest shows the widest gap: 35 percent at home against a 15 percent treaty cap. The 5 percent rate in serial 2 of section 393(2) covers only foreign currency borrowings from 1 Jul 2012 to 30 Jun 2023. See our note on an ECB loan from a foreign parent.

Each cap has a permanent establishment carve out. Article 10(5) and Article 12(6) remove the cap where the shares or the contract are effectively connected with an Indian PE. The income is then business profit under Article 7. Our dividend guide covers the company law side of paying a Singapore parent.

How does the make available clause apply to fees for technical services?

Under Article 12(4), a fee for managerial, technical or consultancy services is a "fee for technical services" in three cases only. The service is ancillary to a royalty, makes available technical knowledge or skill, or develops and transfers a technical plan or design. Any other service fee is business profit under Article 7, taxable in India only through a PE.

Indian domestic law is wider. Section 9(7) of the Income Tax Act, 2025 treats almost any technical or consultancy fee paid by an Indian resident as Indian income. The exception is a fee for a business the payer runs outside India. Section 159(4) lets the Singapore company use the narrower treaty test.

Article 12(4)(b) asks whether the service makes available knowledge, experience, skill, know how or processes. The text then adds "which enables the person acquiring the services to apply the technology contained therein". Article 12(5) also excludes some payments, such as teaching by educational institutions and payments to employees.

Service from a Singapore parent to its Indian company	Article 12(4) result, on our reading	Indian tax without a PE	What we keep on file
Regional finance, HR and legal support calls	Usually not a fee for technical services	Nil under Article 7	Service logs; staff days in India
Group IT helpdesk run from Singapore	Usually not a fee for technical services	Nil	Tickets and service levels
Training that lets Indian engineers run a system alone	Fee for technical services, 12(4)(b)	10%	Training plan and sign off
Design and handover of a technical plan	Fee for technical services, 12(4)(c)	10%	The deliverable
Support ancillary to licensed technology	Fee for technical services, 12(4)(a)	10%	Licence and support agreement

We ask the parent's team one question. What can the Indian staff do alone after the service that they could not do before? That answer usually decides the rate. A fee outside Article 12 still goes on Form 145, in Part D, with a written treaty analysis on file. Our Form 15CA and 15CB guide explains the parts, now in Forms 145 and 146.

The test has a second effect. Article 5(6), the service PE rule, excludes "technical services as defined in Article 12". So a fee for technical services cannot create a service PE, but a routine support fee can. The PE section below gives the day counts.

How are capital gains on Indian shares taxed under the India Singapore DTAA?

Shares of an Indian company that a Singapore resident acquired before 1 Apr 2017 are taxable only in Singapore under Article 13(4A). The seller must pass Article 24A. Shares acquired on or after 1 Apr 2017 are taxable in India under Article 13(4B), at the full domestic rate since 1 Apr 2019.

Until the 2016 protocol took effect, the treaty taxed share gains only in the seller's country of residence. The limitation of benefits clause of the 2005 protocol applied. The Ministry of Finance announced the switch to source taxation on 30 Dec 2016. It gave a two year transition at half the Indian rate.

Shares acquired	Gain arises	Article	Who may tax	Conditions
Before 1 Apr 2017	Any date	13(4A)	Singapore only	Article 24A, with the spending test in each of two 12 month periods
On or after 1 Apr 2017	1 Apr 2017 to 31 Mar 2019	13(4C)	India, at up to 50% of the Indian rate	Article 24A, with the spending test over 12 months
On or after 1 Apr 2017	From 1 Apr 2019	13(4B)	India, at the full domestic rate	None; Singapore gives credit under Article 25(4)
Property other than shares, such as debentures	Any date	13(5)	Singapore only, on our reading	Principal purpose test and GAAR

Where India taxes the gain, domestic rules apply in full. Unlisted shares held for more than 24 months give long term gains at 12.5 percent under section 197. Section 197(4) computes a foreign company's gain on unlisted securities in rupees, without the foreign currency method in section 72(6). Short term gains on unlisted shares bear 35 percent. Surcharge and cess apply on top.

A resident buyer withholds under section 393(2), serial 17, on the sum chargeable. For grandfathered shares, the buyer usually wants a nil certificate in Form 128 before paying gross. Our note on lower TDS certificates covers that application.

Three points decide most Singapore exits we review:

1. Acquisition date by lot. Check each lot against the register and the FC-GPR or FC-TRS filings. A 2015 subscription and a 2019 rights issue fall under different paragraphs.
2. Later shares on old holdings. Bonus shares, conversions and rights after 31 Mar 2017 raise their own date question. We seek a Form 128 certificate instead of assuming Article 13(4A).
3. Buy backs. The Finance Act, 2026 taxes buy back consideration as a capital gain from 1 Apr 2026. On our reading, Article 13 now decides India's right to tax a buy back from a Singapore parent, not Article 10.

Our note on share transfers between residents and non residents covers the FEMA side of a sale.

What is the limitation of benefits clause in Article 24A?

Article 24A denies the grandfathered exemption in Article 13(4A), and the old transition rate in Article 13(4C), in two cases. One is a Singapore company whose affairs were arranged with the primary purpose of taking that benefit. The other is a shell or conduit company. A company spending less than SGD 200,000 on operations in Singapore in each test period is deemed a shell.

Article 24A applies only to those two capital gains paragraphs. Dividends, interest, royalties and fees face the MLI principal purpose test instead.

Test	Paragraph	What the text says	How we evidence it
Primary purpose	24A(1)	No benefit if affairs were arranged with the primary purpose of taking the 13(4A) or 13(4C) benefit	Board papers from the time of investment showing commercial reasons
Shell or conduit	24A(2)	No benefit for an entity with negligible or nil business operations, or no real and continuous business activities in Singapore	Staff, office lease, contracts and revenue in Singapore
Deemed shell	24A(3)	Spending on operations in Singapore below SGD 200,000: for 13(4A), in each 12 month period of the 24 months before the gain; for 13(4C), in the 12 months before	Audited accounts split into two 12 month blocks ending on the date of the gain
Deemed not a shell	24A(4)	Listed on a recognised stock exchange in Singapore, or spending of at least SGD 200,000 in each test period	Listing record, or a spending schedule the auditor has checked
Explanation	24A	Entities without bona fide business activities fall under paragraph 1	Meeting the spending test does not end the inquiry
Mirror test for an Indian resident	24A(3), 24A(4)	INR 50,00,000 instead of SGD 200,000	Applies when an Indian company claims in Singapore

Some summaries still describe the test as SGD 200,000 across 24 months in total. The current text for Article 13(4A) needs the amount in each 12 month period. A company that spent SGD 350,000 in one year and SGD 80,000 in the next fails the test.

The treaty does not define "expenditure on operations". We count the cost of running the business in Singapore: Singapore salaries, rent, directors' fees, and professional and audit fees paid there. We leave out interest, capital spending and costs paid for other group companies.

The Explanation matters most in practice. A company can spend SGD 200,000 a year and still lack bona fide business activity. Spending is evidence of substance, and it does not replace substance.

How does the MLI change the India Singapore treaty?

The MLI added two things to the treaty: a preamble against treaty shopping and a principal purpose test (PPT) from MLI Article 7(1). For Indian taxes both apply from 1 Apr 2020. The PPT denies a treaty benefit where obtaining it was one of the principal purposes of an arrangement. The exception is where granting it fits the treaty's object and purpose.

The synthesised text denies a benefit if "obtaining that benefit was one of the principal purposes of any arrangement or transaction". The officer must find this "reasonable to conclude, having regard to all relevant facts and circumstances". On our reading, "one of the principal purposes" is a lower bar than the "primary purpose" in Article 24A(1).

MLI provision	In the India Singapore synthesised text?	Effect
Article 6, preamble	Yes	Treaty reads against non taxation and treaty shopping
Article 7(1), principal purpose test	Yes	Any benefit can be denied: rates, exemptions and PE rules
Article 4, dual resident entities	No	Article 4(3) place of effective management tie breaker stays
Article 8, 365 day holding period for dividends	No	Article 10(2)(a) has no minimum holding period
Article 9, gains from land rich entities	No	Article 13 stays as amended in 2016
Articles 12 to 15, permanent establishment	No	Article 5 stays as negotiated
Simplified limitation of benefits	No	Only the treaty's own Article 24A

Sources: synthesised text of the India Singapore DTAA on incometaxindia.gov.in and IRAS.

For India, the MLI applies to tax withheld on events from 1 Apr 2020. It applies to other Indian taxes for periods beginning on or after that date. For Singapore, withholding taxes follow from 1 Jan 2020 and other taxes from periods beginning on or after 1 Apr 2020.

CBDT Circular No. 01/2025 of 21 Jan 2025 guides officers on the PPT. It names the India Singapore treaty among three treaties with grandfathering. Those provisions "shall remain outside the purview of the PPT provision". So Article 24A, not the PPT, tests a gain on shares acquired before 1 Apr 2017.

The circular asks for "an objective assessment of the relevant facts and circumstances", case by case. Officers may refer to the UN Model Commentary on Articles 1 and 29 (2021 update) and the BEPS Action 6 report, subject to India's reservations. Section 536 of the Income Tax Act, 2025 keeps such circulars alive where they are consistent with the new Act.

Does GAAR or the Tiger Global ruling affect a Singapore holding company?

Yes, for most income. Section 159(6) of the Income Tax Act, 2025 applies GAAR in Chapter XI even where the treaty is more beneficial. Rule 128 of the Income Tax Rules, 2026, amended from 1 Apr 2026, keeps GAAR away from one item. That item is income on the transfer of investments made before 1 Apr 2017.

On 15 Jan 2026 the Supreme Court decided Authority for Advance Rulings (Income Tax) v. Tiger Global International II Holdings (2026 INSC 60), a Mauritius case. The revenue appealed against a Delhi High Court judgment of 28 Aug 2024. That judgment had quashed the Authority's order of 26 Mar 2020. The Authority had rejected Tiger Global's applications as prima facie designed to avoid tax. It relied on clause (iii) of the proviso to section 245R(2) of the 1961 Act.

The arguments turned on two questions. Is a tax residency certificate conclusive proof of residence? And did old rule 10U(1)(d) protect investments made before 1 Apr 2017 from rule 10U(2)? The official copy we opened on 1 Oct 2026 broke off before the final order. So we do not state the result or the holdings here. Read the operative part of the judgment before relying on any summary of it.

CBDT amended the GAAR rules on 31 Mar 2026:

1. Notification No. 54/2026 (G.S.R. 240(E)). The Income Tax (Tenth Amendment) Rules, 2026 amended rule 10U of the Income Tax Rules, 1962, from publication.
2. Notification No. 55/2026 (G.S.R. 241(E)). The Income Tax (Amendment) Rules, 2026 amended rule 128 of the Income Tax Rules, 2026, from 1 Apr 2026.

Rule 128(2) now applies Chapter XI to any arrangement for a tax benefit obtained on or after 1 Apr 2017. It excepts income from "transfer of such investments which were made before the 1st April, 2017 by such person". Rule 10U(2) of the 1962 Rules carries the same exception.

Benefit claimed by a Singapore company	Beneficial ownership test	Article 24A	MLI principal purpose test	GAAR
Dividend at 10% or 15%	Yes, Article 10(2)	No	Yes	Yes
Interest at 10% or 15%	Yes, Article 11(2)	No	Yes	Yes
Royalty or technical fee at 10%	Yes, Article 12(2)	No	Yes	Yes
No tax on a service fee without a PE	No	No	Yes	Yes
Gain on shares acquired before 1 Apr 2017	No	Yes	No, per Circular 01/2025	No, per rule 128 as amended
Gain on property other than shares, Article 13(5)	No	No	Yes	Yes

On our reading, a grandfathered Singapore holding now faces Article 24A and a review of its residence. A dividend or fee claim faces the PPT and GAAR as well. No route accepts a certificate of residence alone.

When does a Singapore company have a permanent establishment in India?

A Singapore company has a permanent establishment (PE) in India if it has a fixed place of business here. A building or installation project lasting over 183 days also counts. Staff furnishing services other than technical services create a PE after 90 days in a fiscal year. For services to a related enterprise, such as its Indian subsidiary, the limit is 30 days.

PE trigger	Article	Threshold	Typical risk for a Singapore parent
Fixed place of business: place of management, branch, office, factory, workshop, sales outlet	5(1), 5(2)	No day count in the text	Parent staff using a room in the Indian office as their own
Building site, construction, installation or assembly project, or supervising one	5(3), 5(4)	More than 183 days in a fiscal year	Plant set up, or a build supervised, for the Indian company
Service PE through employees or other personnel	5(6)(a)	More than 90 days in a fiscal year	Consultants on site for a customer
Service PE for a related enterprise	5(6)(b)	More than 30 days in a fiscal year	Parent staff working in India for the Indian subsidiary
Dependent agent	5(8)	Habitually concludes contracts, keeps and delivers stock, or habitually secures orders for the group	Indian staff negotiating and closing deals for the parent
Agent working wholly or almost wholly for the group	5(9)	Not an agent of independent status	Indian distributor tied to the group
Preparatory or auxiliary place	5(7)	Not a PE, unless the parent has another fixed place in India	Purchasing or information work only
Subsidiary	5(10)	Control alone does not make it a PE	Holds while the subsidiary acts for itself

Source: India Singapore DTAA, Article 5. Article 5(2)(j) and 5(5) add tests for natural resources and mineral oils.

The treaty counts days in a "fiscal year". For India, Article 3 means the previous year under section 3 of the 1961 Act. We apply the tax year under section 3 of the 2025 Act, April to March. For Singapore it is the calendar year.

The 30 day rule is the PE rule we see missed most often. A finance controller visiting for a week each quarter, plus a two week project, crosses it. If that work is not a fee for technical services, the parent may have a service PE.

A PE changes the regime. Article 7(2) attributes profit to the PE as if it were a separate enterprise dealing independently. India taxes that profit at the foreign company rate of 35 percent, plus surcharge and cess, through a return. Royalties and fees connected with the PE move to section 59 of the 2025 Act (old section 44DA), with an audit report in Form 24.

Residence is a related risk. Section 6(10)(a) of the Income Tax Act, 2025 makes a company resident in India if its place of effective management is in India. Section 6(10)(b) defines that as where "key management and commercial decisions" are "in substance, made". A Singapore company run from Bengaluru by its Indian directors risks Indian residence. Our guide on how to avoid permanent establishment risk covers the controls.

What documents does a Singapore company need to claim treaty benefits?

Section 159(8) of the Income Tax Act, 2025 needs two things. One is a tax residency certificate from the Singapore Government, which IRAS issues as a certificate of residence (COR). The other is the prescribed information in Form 41, filed online under rule 75. The Indian payer also wants a PAN or rule 217 details, declarations and a chartered accountant's Form 146.

Document	Issued or filed by	What it supports	Timing
Certificate of residence (COR)	IRAS	Section 159(8)(a); Article 4	Must cover the date of credit or payment
Form 41 (old Form 10F)	Singapore company, online, verified by EVC, DSC or OTP	Section 159(8)(b); rule 75	Once per tax year, before the first payment
PAN, or the six rule 217 details	Singapore company	Avoids the higher rate under section 397(2)	Before tax is deducted
Beneficial ownership declaration, with the register showing the holding	Singapore company and Indian company	Articles 10(2), 11(2) and 12(2)	Each year, and on each dividend date
No PE declaration	Singapore company	Articles 7, 10(5) and 12(6)	Each year, updated on any change
Service agreement and evidence of what was made available	Both companies	Article 12(4)	Before the first invoice
Acquisition records by lot and Singapore spending schedule	Both companies	Articles 13 and 24A	Before any share sale
Form 146 (old 15CB), then Form 145 (old 15CA)	Chartered accountant, then Indian company	Rate and article examined; remittance information	Before the money leaves India
Form 131 (old 16A)	Indian company, from TRACES	Credit for Indian tax	Within 15 days of the Form 144 due date

IRAS treats a company as tax resident in Singapore when its control and management is exercised in Singapore. The Singapore company applies to IRAS for the COR. Check the IRAS certificate of residence page for the current application route and the period one certificate covers. India's tax year runs April to March, so check that the certificate covers every payment date.

The Form 41 guidance note says the form is filed "only once in a tax year" and PAN is optional. It also says: "Benefit of DTAA is available only with filing of Form 41." A filer without a PAN verifies by OTP. Still, the Singapore company needs a PAN for the Indian return a treaty rate triggers, and for a downloadable Form 131.

Rule 217 lists six details that stop the higher rate under section 397(2). They are name, email, phone number, address in Singapore, the COR and the Singapore tax identification number.

If the COR is late, deduct at the domestic rate, and the Singapore company claims the excess through its Indian return. The alternative is a lower deduction certificate in Form 128 under section 395(1). With it, the payer files Form 145 in Part B and needs no Form 146.

What substance should a Singapore holding company show?

A Singapore holding company should show a real business in Singapore that a tax officer can see in its records. The treaty sets one hard number, SGD 200,000 of yearly spending, and only for grandfathered gains. The PPT, GAAR and residence reviews look further. The points below are our practice, not a list from the treaty.

Area	What we look for	Rule it supports
Board	Most directors resident in Singapore, with the knowledge to run the Indian investment	IRAS control and management; section 6(10); PPT
Decisions	Dividends, fees, funding and exits decided and minuted in Singapore before the Indian company acts	PPT; place of effective management
People	Employees in Singapore with real regional roles, such as treasury, IP management or regional sales	Article 24A(2)
Premises	An office lease in Singapore, beyond a corporate secretary's address	Article 24A(2)
Spending	Operating spend of at least SGD 200,000 in each 12 month period, tracked by period	Article 24A(3) and 24A(4)
Money	A Singapore bank account that receives the Indian income and is run from Singapore	Article 24; beneficial ownership
Discretion	No duty in contract or practice to pass dividends or fees straight on	Beneficial ownership in Articles 10, 11 and 12
Commercial reasons	A dated note of why the group used Singapore, such as a regional headquarters, investors or financing	PPT; Article 24A(1)

We see two weak spots often. One is a board of nominee directors who sign what the group sends them. The other is Indian income paid to an account outside Singapore.

Substance also cuts the other way. A Singapore company whose real decisions are taken in India fails the test and risks Indian residence. Directors should not run the Singapore company from India.

How does Singapore give credit for Indian tax under Article 25?

Article 25(4) requires Singapore to credit Indian tax on Indian income against Singapore tax on that income, subject to Singapore's credit rules. For a dividend to a 25 percent shareholder, the credit also takes into account the Indian company's tax on its profits. Article 25(2) gives Indian residents a matching credit for Singapore tax.

Whether the Singapore company pays any Singapore tax on an Indian dividend or fee is a Singapore law question. Ask the Singapore adviser before choosing between a dividend, a fee and a royalty. Our repatriation guide compares the routes from the Indian side.

Article 24 limits relief in one case. Singapore may tax an item by reference to the amount remitted to or received in Singapore. India's exemption or reduced rate then applies only to that amount. We pay Indian income into the Singapore company's own bank account in Singapore, so Article 24 does not arise.

Does a Singapore company have to file an Indian tax return?

Yes, whenever it takes a treaty rate below the domestic rate. Section 207(8) of the Income Tax Act, 2025 excuses a foreign company only on two conditions. Its Indian income must consist of section 207 items, and tax must be deducted at the section 207 rate or more. A 10 percent treaty rate fails the second condition.

So a Singapore parent paid a 10 percent dividend files an Indian return for that tax year. It needs a PAN, and section 263 sets the due date for companies. The return is also where it recovers tax deducted at the domestic rate before its COR arrived.

Capital gains and PE profits also need a return. On our reading, section 207(8) covers dividends, interest, royalties and technical fees, not capital gains. We file the parent's return on the same engagement as the Form 146, so the Form 131 credit matches.

What changed in 2026

The treaty text did not change in 2026. The treaty page on incometaxindia.gov.in lists no notification after S.O. 935(E) of 23 Mar 2017, when we checked it on 1 Oct 2026. The Indian law around it changed: a new Act and rules, a Supreme Court ruling and a GAAR rule amendment.

Item	Until 31 Mar 2026	From 1 Apr 2026	Instrument
Treaty relief and the more beneficial rule	Section 90(1) and 90(2)	Section 159(4)	Income Tax Act, 2025
GAAR override of treaties	Section 90(2A)	Section 159(6)	Income Tax Act, 2025
Tax residency certificate and other documents	Section 90(4) and 90(5)	Section 159(8)(a) and 159(8)(b)	Income Tax Act, 2025
Treaty information form	Form 10F, rule 21AB	Form 41, rule 75	Income Tax Rules, 2026
Withholding on payments to non residents	Section 195	Section 393(2), Table serial 17	Income Tax Act, 2025
Rates on dividends, interest, royalties and technical fees	Section 115A	Section 207	Income Tax Act, 2025
Return filing exemption	Section 115A(5)	Section 207(8)	Income Tax Act, 2025
Remittance, statement and certificate forms	Forms 15CA, 15CB, 27Q and 16A	Forms 145, 146, 144 and 131	Income Tax Rules, 2026
GAAR grandfathering for investments made before 1 Apr 2017	Rule 10U(1)(d), read with rule 10U(2)	Rule 128(2) as substituted; rule 10U also amended	Notification Nos. 54/2026 and 55/2026, 31 Mar 2026
Tax residency certificate as proof	Relied on as evidence of residence	Argued before the Supreme Court in Tiger Global, decided 15 Jan 2026; read the final order before relying on any summary	Supreme Court, 2026 INSC 60
Buy back by an Indian company	Deemed dividend from 1 Oct 2024, so Article 10	Capital gain, so Article 13 on our reading	Finance Act, 2026

Board packs, Forms 146 and bank letters should now cite sections 159 and 393, not sections 90 and 195. The other changes are mapped in our note on the Income Tax Act, 2025.

Worked example

A Singapore parent receiving a dividend and technical fees

SingCo Pte. Ltd. is resident in Singapore and owns 100 percent of IndiaCo Private Limited. A nominee holds one share for SingCo. In tax year 2026-27 IndiaCo pays SingCo two amounts:

1. A fee of INR 2,00,00,000. SingCo's engineers designed a quality control process and trained IndiaCo's team to run it alone. IndiaCo books the fee on 30 Oct 2026.
2. An interim dividend of INR 5,00,00,000. IndiaCo's Board declares it on 10 Nov 2026 under section 123(3).

SingCo filed Form 41 for tax year 2026-27 in May 2026 and holds a COR covering both dates. It has a PAN and has given beneficial ownership and no PE declarations. Its engineers spent 20 days in India.

The fee makes technical knowledge available, because IndiaCo's team can run the process alone. So it is a fee for technical services under Article 12(4)(b) and bears 10 percent. As a technical service, it cannot create a service PE under Article 5(6).

SingCo owns more than 25 percent of IndiaCo's shares, so the dividend bears 10 percent under Article 10(2)(a). Without the treaty papers, both payments bear the domestic 20 percent. The year's total to SingCo is INR 7,00,00,000, in the 2 percent surcharge slab.

Line (INR)	Dividend, treaty route	Dividend, domestic route	Fee, treaty route	Fee, domestic route
Gross amount	5,00,00,000	5,00,00,000	2,00,00,000	2,00,00,000
Base tax at 10% or 20%	50,00,000	1,00,00,000	20,00,000	40,00,000
Surcharge at 2% of base tax	Nil	2,00,000	Nil	80,000
Health and Education Cess at 4%	Nil	4,08,000	Nil	1,63,200
Tax withheld	50,00,000	1,06,08,000	20,00,000	42,43,200
Effective rate	10%	21.216%	10%	21.216%
Net amount remitted	4,50,00,000	3,93,92,000	1,80,00,000	1,57,56,800

On the treaty route IndiaCo withholds INR 70,00,000 in total, against INR 1,48,51,200 on the domestic route. SingCo receives INR 6,30,00,000 instead of INR 5,51,48,800, a difference of INR 78,51,200.

Date	Step	Rule
30 Oct 2026	Book the fee and deduct INR 20,00,000	Section 393(2), serial 17
Before the fee leaves India	Obtain Form 146 citing Article 12; file Form 145, Part C	Rule 220
7 Nov 2026	Deposit the tax on the fee	Rule 218(2)
10 Nov 2026	Declare the dividend, book it and deduct INR 50,00,000	Companies Act s.123(3); section 393(2)
By 15 Nov 2026	Deposit the dividend in a separate bank account	Companies Act s.123(4)
7 Dec 2026	Deposit the tax on the dividend	Rule 218(2)
By 10 Dec 2026	Pay the dividend to SingCo's bank account in Singapore, after Forms 146 and 145	Companies Act s.127; rule 220
By 31 Jan 2027	File Form 144 for October to December 2026 at the treaty rates	Rule 219
By 15 Feb 2027	Issue Form 131 for both payments	Rule 215
Section 263 due date	SingCo files its Indian return for tax year 2026-27	Section 207(8)

IndiaCo also pays IGST on the imported fee under reverse charge and usually claims it back as input tax credit. It reports the fee in its transfer pricing report in Form 48 under section 172. Our TP documentation guide covers the file behind it.

The same fee without anything made available

Suppose instead that the INR 2,00,00,000 paid for regional finance and HR support, with nothing transferred. The fee is not a fee for technical services. It is SingCo's business profit under Article 7, taxable in India only through a PE. IndiaCo deducts nothing and files Form 145 in Part D, backed by a written treaty analysis.

Now suppose SingCo's support team worked in India for IndiaCo for 35 days in the tax year. That crosses the 30 day limit for a related enterprise in Article 5(6)(b). SingCo has a service PE, and India taxes the attributable profit at 35 percent plus surcharge and cess. The day count decides the result, not the invoice label.

A later sale of two lots of shares

In 2027 SingCo sells its IndiaCo shares to an Indian buyer. Lot A was subscribed in 2015 and carries a gain of INR 3,00,00,000. Lot B came from a 2019 rights issue and carries a gain of INR 2,00,00,000.

Lot	Acquired	Article	Indian tax (INR)
A	2015	13(4A)	Nil, if SingCo passes Article 24A in each 12 month period of the 24 months before the sale
B	2019	13(4B)	26,52,000: 12.5% of 2,00,00,000, plus 2% surcharge and 4% cess

The buyer withholds INR 26,52,000 on lot B under section 393(2), serial 17. It pays lot A without deduction only with a nil certificate in Form 128. The 2 percent slab is an assumption; the buyer applies the slab for the actual payment.

Common mistakes

1. Adding surcharge and cess to the treaty rate. In the 2 percent slab, a 10 percent dividend then bears 10.608 percent. Fix: apply the treaty rate flat and cite the article in Form 146.
2. Treating every service fee as a 10 percent technical fee. Fix: test each service against Article 12(4). A fee that makes nothing available bears no Indian tax without a PE.
3. Ignoring the 30 day service PE rule. Fix: track the parent's staff days in India for the subsidiary across the whole tax year.
4. Reading the SGD 200,000 test as a 24 month total. Fix: test each 12 month period within the 24 months before the gain.
5. Assuming all old holdings are exempt. Fix: check each lot's acquisition date, including bonus and rights shares.
6. Relying on the COR alone. Fix: keep Form 41, beneficial ownership evidence and a substance file.
7. Paying into an account outside Singapore. Fix: pay into the Singapore company's bank account in Singapore so Article 24 does not bite.
8. Telling the parent the treaty rate ends its Indian filings. Fix: plan a PAN and an Indian return under section 207(8).
9. Using the 5 percent rate for a new parent loan. Fix: apply the 15 percent treaty cap, or 10 percent for a bank lender.
10. Citing sections 90 and 195 in a 2026 Form 146. Fix: cite sections 159, 207 and 393(2), serial 17.

Checklist for claiming India Singapore treaty benefits

1. Confirm the Singapore company holds a COR covering each payment date.
2. File Form 41 once for the tax year before the first payment.
3. Obtain a PAN, or collect the six rule 217 details.
4. Classify each payment as dividend, interest, royalty, technical fee, business profit or capital gain.
5. Test service fees against the make available clause in Article 12(4).
6. Count the parent's staff days in India against the 30 and 90 day limits in Article 5(6).
7. Check the shareholding against the 25 percent test in Article 10(2)(a).
8. Add up the year's payments to fix the domestic surcharge slab.
9. Collect beneficial ownership and no PE declarations.
10. Review the substance file against the PPT and GAAR.
11. Deduct tax at the earlier of credit and payment, at the flat treaty rate.
12. Obtain Form 146 and file Form 145 before each remittance.
13. Deposit the tax by the 7th of the next month, file Form 144 and issue Form 131.
14. Test Article 24A and each lot's acquisition date before any share sale.
15. Remind the Singapore company to file its Indian return.

To have us review a Singapore payment or exit before it happens, send the agreement and the shareholding through our contact page.

Frequently Asked Questions

Is the India Singapore DTAA dividend rate 10 or 15 percent?+

Both, depending on the holding. Article 10(2)(a) caps it at 10 percent for a beneficial owner company holding at least 25 percent of the shares. Article 10(2)(b) caps it at 15 percent in all other cases. The Indian company deducts under section 393(2) at the treaty rate once it holds the COR and Form 41.

Do surcharge and cess apply on top of the treaty rate?+

We do not add them. Article 2 of the treaty names Indian income tax "including any surcharge thereon" as a covered tax. Tribunal rulings treat cess as part of the tax capped, though no CBDT circular settles the point. So we apply 10 percent flat on a qualifying dividend and state the article in Form 146.

What is the TDS rate on interest paid to a Singapore parent?+

Article 11(2)(b) caps it at 15 percent, and Article 11(2)(a) at 10 percent for a bank or similar financial institution. Domestic law charges 20 percent on foreign currency loans under section 207 and 35 percent on rupee loans. So a rupee loan from a Singapore parent bears 15 percent with the COR and Form 41.

Is a software subscription paid to a Singapore company a royalty?+

Usually not. The Supreme Court ruled in Engineering Analysis Centre of Excellence Private Limited on 2 Mar 2021. It held that end user software licences are not royalty under India's treaties. Section 9(6) of the Income Tax Act, 2025 still counts software as royalty at home. So the COR and Form 41 decide the result.

How often does a Singapore company file Form 41?+

Once per tax year. Form 41 is filed under section 159(8)(b) and rule 75 of the Income Tax Rules, 2026. Its guidance note says "only once in a tax year". PAN is optional, and a filer without one verifies by OTP. The COR must still cover each payment date in that year.

What happens if the COR arrives after the payment?+

The Indian company deducts at the domestic rate under section 207, plus surcharge and cess. Section 159(8) makes the certificate a condition of treaty relief. The Singapore company then files an Indian return with the COR and Form 41 and claims the excess as a refund. A Form 128 certificate under section 395(1) is the other route.

Are shares a Singapore company bought before 2017 still exempt from Indian tax?+

Yes, under Article 13(4A), if the company passes Article 24A. It must not be a shell or conduit, and its affairs must not be arranged mainly for the exemption. CBDT Circular No. 01/2025 keeps this grandfathering outside the principal purpose test. Rule 128 of the Income Tax Rules, 2026, as amended, keeps GAAR away from it.

Does the SGD 200,000 spending test apply to dividends or fees?+

No. Article 24A applies only to the capital gains benefits in Article 13(4A) and 13(4C). Dividends, interest, royalties and technical fees face the beneficial ownership test, the MLI principal purpose test and GAAR instead. We still track Singapore spending by 12 month period, because it is good evidence of substance.

Does India tax the sale of a Singapore company that owns an Indian subsidiary?+

On our reading, the treaty gives that right to Singapore. Article 13(4B) lets the country where the company sold is resident tax gains on its shares, and that company is Singaporean. India would need the principal purpose test or GAAR under section 159(6) to tax it. We review such exits case by case before signing.

Can staff sent from Singapore create a PE for the parent?+

Yes. Under Article 5(6)(b), staff furnishing services in India for a related enterprise create a service PE after 30 days in a fiscal year. For unrelated customers the limit is 90 days. Technical services within Article 12 are excluded, and Article 12 taxes them at 10 percent instead. Secondments also need review under Article 5(8).

Is the Indian subsidiary itself a PE of the Singapore parent?+

Not by control alone. Article 5(10) says control between companies does not, by itself, make either a PE of the other. A subsidiary can still become a dependent agent PE under Article 5(8). That happens if it habitually concludes contracts, keeps and delivers stock, or habitually secures orders for the parent.

What if the Singapore company's board meets in India?+

It risks Indian residence. Under section 6(10) of the Income Tax Act, 2025, a company is resident in India if its place of effective management is here. Article 4(3) of the treaty breaks a dual residence tie by the same test. Hold board meetings in Singapore and take key decisions there.

Does Article 24 require the money to reach Singapore?+

Only where Singapore taxes the income by reference to the amount remitted to or received in Singapore. Article 24 then limits India's exemption or reduced rate to that amount. We avoid the question by paying dividends, fees and interest into the Singapore company's own bank account in Singapore. We keep the bank's remittance advice on file.

Does Singapore withhold tax on dividends paid to an Indian parent?+

No, under the treaty. Article 10(3) exempts dividends paid by a Singapore company to an Indian resident from any extra Singapore tax on dividends. That holds while Singapore taxes only company profits. The Indian parent pays Indian tax on the dividend. Under Article 25(2), a 25 percent holder gets credit for the Singapore tax on the underlying profits, claimed in Form 44.

Which forms replaced Form 10F, 15CA and 15CB?+

From 1 Apr 2026, Form 41 replaced Form 10F under rule 75 of the Income Tax Rules, 2026. Forms 145 and 146 replaced Forms 15CA and 15CB under rule 220. Form 144 replaced Form 27Q, and Form 131 replaced Form 16A. An Indian resident now applies for a residence certificate in Form 42 and receives it in Form 43.

Can a transfer pricing dispute with a Singapore parent go to mutual agreement?+

Yes. Article 27 lets a resident present a case to its own competent authority within three years of receiving notice of the action. Article 9(2), added by the 2016 protocol, allows a corresponding adjustment. The Indian application for the mutual agreement procedure is Form 55, and a bilateral advance pricing agreement starts with Form 51.

Sources

• Income Tax Department, India Singapore DTAA with protocols (GSR 610(E), 8 Aug 1994; S.O. 1022(E), 18 Jul 2005; S.O. 2031(E), 1 Sep 2011; S.O. 935(E), 23 Mar 2017), read 1 Oct 2026, https://www.incometaxindia.gov.in/w/singapore-comprehensive-agreements-1
• Income Tax Department, Synthesised text of the India Singapore DTAA as modified by the MLI, read 1 Oct 2026, https://www.incometaxindia.gov.in/w/singapore-synthesised-text-1
• Inland Revenue Authority of Singapore, Singapore India DTA as modified by the MLI, 1 Oct 2019, https://www.iras.gov.sg/media/docs/default-source/dtas/protocol-amending-singapore-india-dta-(ratified)(mli)(1-oct-2019).pdf?sfvrsn=dd28a790_0
• Inland Revenue Authority of Singapore, Tax residency of a company and certificate of residence, read 1 Oct 2026, https://www.iras.gov.sg/taxes/corporate-income-tax/basics-of-corporate-income-tax/tax-residency-of-a-company-certificate-of-residence
• Press Information Bureau (Ministry of Finance), India and Singapore sign a Third Protocol amending the DTAA, 30 Dec 2016, https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=156015
• Press Information Bureau (Ministry of Finance), Third Protocol amending the India Singapore DTAA notified, 23 Mar 2017, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1485485
• Central Board of Direct Taxes, Circular No. 01/2025, Guidance for application of the Principal Purpose Test under India's DTAAs, 21 Jan 2025, https://www.incometaxindia.gov.in/documents/d/guest/circular-1-2025-pdf
• Central Board of Direct Taxes, Notification No. 54/2026, Income Tax (Tenth Amendment) Rules, 2026 (rule 10U), G.S.R. 240(E), 31 Mar 2026, https://www.incometaxindia.gov.in/documents/d/guest/notification-no-54-2026-pdf
• Central Board of Direct Taxes, Notification No. 55/2026, Income Tax (Amendment) Rules, 2026 (rule 128), G.S.R. 241(E), 31 Mar 2026, https://www.incometaxindia.gov.in/documents/d/guest/notification-no-55-2026-1-pdf
• Supreme Court of India, Authority for Advance Rulings (Income Tax) v. Tiger Global International II Holdings, 2026 INSC 60, 15 Jan 2026, https://api.sci.gov.in/supremecourt/2025/1251/1251_2025_7_1501_67552_Judgement_15-Jan-2026.pdf
• Supreme Court of India, Engineering Analysis Centre of Excellence Private Limited v. Commissioner of Income Tax, 2 Mar 2021, https://api.sci.gov.in/supremecourt/2011/38137/38137_2011_33_1501_26629_Order_02-Mar-2021.pdf
• Income Tax Department, Income Tax Act, 2025 as amended by the Finance Act, 2026, https://www.incometaxindia.gov.in/documents/d/guest/income_tax_act_2025_as_amended_by_fa_act_2026-pdf
• Income Tax Department, Section 6 of the Income Tax Act, 2025 (residence; sub section (10)), read 1 Oct 2026, https://www.incometaxindia.gov.in/w/section-6-1
• Income Tax Department, Section 159 of the Income Tax Act, 2025 (double taxation relief), read 1 Oct 2026, https://www.incometaxindia.gov.in/w/section-159-89
• Income Tax Department, Section 207 of the Income Tax Act, 2025 (sub sections (1), (2) and (8)), read 1 Oct 2026, https://www.incometaxindia.gov.in/w/section-207-78
• Income Tax Department, Section 197 of the Income Tax Act, 2025 (long term capital gains), https://www.incometaxindia.gov.in/w/section-197-78
• Income Tax Department, Section 393 of the Income Tax Act, 2025 (tax deducted at source), https://www.incometaxindia.gov.in/w/section-393-6
• Income Tax Department, Section 397 of the Income Tax Act, 2025 (PAN and information on payments to non residents), https://www.incometaxindia.gov.in/w/section-397-6
• Income Tax Department, Rules 215, 217, 218, 219 and 220 of the Income Tax Rules, 2026, https://www.incometaxindia.gov.in/w/rule-215-1, https://www.incometaxindia.gov.in/w/rule-217-1, https://www.incometaxindia.gov.in/w/rule-218-1, https://www.incometaxindia.gov.in/w/rule-219-1, https://www.incometaxindia.gov.in/w/rule-220-1
• Income Tax Department, First Schedule to the Finance Act, 2026 (Part II rates), https://www.incometaxindia.gov.in/w/first-schedule-104
• Income Tax Department, FAQs on Tax Deducted at Source (rates for tax year 2026-27), https://www.incometaxindia.gov.in/documents/d/guest/faqs-on-tax-deducted-source
• Income Tax Department, Guidance note on Form 41, read 1 Oct 2026, https://www.incometaxindia.gov.in/documents/d/guest/fn-41
• Income Tax Department, FAQs and Guidance Notes on Forms as per Income Tax Rules, 2026 (form map), https://www.incometaxindia.gov.in/faqs-and-guidance-notes-on-forms-as-per-income-tax-rules-2026