India and Singapore signed a protocol dated 29 June 2005. This protocol will form part of the India-Singapore tax treaty dated 24 January 1994, and will enter into force and be effective as from 1 August 2005.

Reduction of withholding tax rate on "royalties" and "fees for technical services" (FTS)

With regard to royalties/FTS arising in a state and paid to a resident of the other state, the protocol provides that the tax in the source state shall not exceed 10%, if the recipient is the beneficial owner of such royalties/FTS.

The Indian Income Tax Act 1961 (ITA) has been recently amended to reduce the domestic withholding tax rate on royalties/FTS to 10%. However, the reduced rate und…