Article 12 - Royalties
Royalties paid to a resident of the other State may be taxed in the recipient's State; the source State retains a withholding right at the treaty rate, subject to beneficial ownership.
The India-United States DTAA rate on royalties is 15% general (copyright, patent, trademark, know-how) / 10% on equipment. Corrected 2026-09-04: current rate is 15% for Article 12(3)(a) rights (including copyright) and 10% for equipment royalties (3(b)). The previously-shown "20% on copyright" was a first-five-years transitional rate that expired around 1995 and is no longer current.
Definition: "Royalties" means payments for the use of, or the right to use, copyrights, patents, trademarks, designs, secret formulas, industrial/commercial/scientific experience (know-how), or for the use of industrial, commercial, or scientific equipment. The Supreme Court in Engineering Analysis Centre of Excellence v. CIT [2021] clarified that sale of off-the-shelf software is not royalty - distinguishing sale of a copyrighted article from transfer of copyright.
Practical filing: Indian payers withhold the treaty rate on royalty remittances against TRC + Form 10F. Form 15CB (CA certificate) and Form 15CA (e-filing) are also required for remittance.