A Russian parent can take money out of its Indian subsidiary as dividends, service fees, royalties, interest, loan repayments, buy-backs or sale proceeds. The treaty caps Indian withholding at 10% on dividends, interest, royalties and fees for technical services when the paperwork is in place, against a domestic rate of about 20% plus surcharge and cess on dividends to non-residents. The tax is the easy part. The route is harder: the receiving Russian bank, intermediaries and currency must be acceptable to the Indian bank, and payments to related parties are scrutinised, so keep contracts, evidence of service and arm's length support.
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Key facts
| Dividends | 10% treaty rate with a Russian beneficial owner taxable in Russia; paid from distributable profits after audit and shareholder approval |
|---|---|
| Service fees | Fees for technical services at 10% under the treaty if technical, managerial or consultancy; GST reverse charge applies |
| Royalties | 10%; licence agreement and valuation required |
| Interest | 10%; ECB limits; interest limitation rule |
| Loan principal | No tax on principal; follows the ECB schedule |
| Paperwork | Russian tax residency certificate, Form 41, no-PE declaration, Form 145 (previously 15CA), Form 146 (previously 15CB) where needed |
| Route | Receiving bank and currency must pass the Indian bank's sanctions and compliance checks |
| Russian side | Tax with credit for Indian tax; currency control and notification rules; confirm with a Russian adviser |
The routes compared
| Route | Indian tax on the outflow | Russian result | Watch for |
|---|---|---|---|
| Dividends | 10% under the treaty, against about 20% plus surcharge and cess domestically | Possibly 0% for qualifying holdings or taxed with credit; confirm | Distributable profits; Form 41 before payment; MLI principal purpose test |
| Service fees | 10% if fees for technical services; nil if business profits without a PE | Taxable with credit | Evidence of service, arm's length price, GST reverse charge |
| Royalties | 10% | Taxable with credit | Licence agreement, valuation, transfer pricing |
| Interest | 10%; limits on cost and amount | Taxable with credit | ECB ceiling; interest limitation rule |
| Loan principal | None on principal | Not income | Maturity, registration and payment route |
| Buy-back or sale proceeds | Capital gain tax; buy-back treatment depends on current law | Taxed with credit as per Russian rules | Tax on gains in India; see exit guide |
Paying a dividend
- Prepare audited accounts and confirm distributable profits under the Companies Act.
- The board recommends and shareholders approve the dividend.
- Collect from the Russian parent: tax residency certificate, Form 41, beneficial ownership and no-PE declaration.
- Deduct Withholding Tax at the treaty rate under Section 393 of the Income-tax Act, 2025, and deposit it by the 7th of the following month.
- Confirm the receiving bank and currency with the Indian bank in advance, then remit with Form 145 (and Form 146 if the bank requires a chartered accountant's certificate).
Service fees, royalties and recharges
- Payments for management, technical or consultancy services are fees for technical services at 10% under the treaty if the paperwork is in place, plus GST on reverse charge.
- A recharge of salaries for seconded staff is a service fee; apply Withholding Tax and transfer pricing. See Russian employees in India.
- Pay only for services actually received, and keep the contract, invoices and evidence of benefit.
- A royalty needs a written licence agreement, a clear scope and arm's length pricing. See transfer pricing.
Remittance paperwork
| Document | When | Purpose |
|---|---|---|
| Tax residency certificate and Form 41 | Before the first payment each year | Claim treaty rate |
| Beneficial ownership and no-PE declaration | Before payment | Support treaty claim and principal purpose test |
| Form 145 (previously 15CA) | Each foreign remittance | Online declaration to the tax department |
| Form 146 (previously 15CB) | Where required for the remittance | Chartered accountant's certificate |
| Withholding Tax return and certificate | Quarterly return; certificate to the payee | Russian credit and records |
Russian side
Russian tax and currency control on receipts are for your Russian adviser. See Russian parent obligations. ₹10 lakh is about RUB 845,000 at an indicative ₹1.18 per rouble (27 October 2026 market rate; check the live rate before remitting).
Official sources
Check the rules at the primary sources: Income Tax Department (India), Reserve Bank of India, Ministry of Corporate Affairs, Federal Tax Service (Russia), Bank of Russia and the Ministry of External Affairs (India).
Frequently asked questions
What is the withholding tax on dividends paid from India to a Russian parent?
10% of the gross amount under the treaty if the Russian company is the beneficial owner and the paperwork is in place. The domestic rate is about 20% plus surcharge and cess.
Which forms do I need to send money to Russia?
Form 145 for the remittance, and Form 146 where a chartered accountant's certificate is needed, along with Form 41 and the tax residency certificate for treaty rates.
Can I pay a management fee to Russia?
Yes if it is for real services at an arm's length price, with Withholding Tax at 10% as fees for technical services under the treaty and GST on reverse charge.
Can the subsidiary pay dividends from capital?
No. Dividends must come from distributable profits as the Companies Act requires.
Can I repay a loan to Russia?
Yes, following the registered ECB schedule through the bank. Principal is not taxed, but interest is subject to Withholding Tax.
Can any bank receive the money in Russia?
The Indian bank must be willing to send to the receiving bank and currency. Sanctions screening can restrict the options.
What if the Russian company is only a conduit?
The MLI principal purpose test and the general anti-avoidance rule can deny treaty relief. Keep commercial substance in Russia.
Related guides
India-Russia Double Taxation Agreement Explained: 10% Dividends, Interest, Royalties and Technical Fees, PE Rules and the MLI
The India-Russia tax treaty explained for a Russian parent: 10% dividends, interest, royalties and fees for technical services, permanent establishment, share gains, credit method, the MLI principal purpose test and how to claim treaty rates.
Read the guide →Transfer Pricing between India and Russia: Arm's Length Pricing, Goods and Services Flows, Documentation and Safe Harbours
Transfer pricing for a Russian group with an Indian subsidiary: arm's length rules, accountant's report, master file and local file, supply of equipment and components, management fees, royalties, advance pricing agreements and safe harbours.
Read the guide →Funding Your Indian Subsidiary from Russia: Equity, Preference Shares, External Borrowing, FEMA Reporting and the Remittance Route
How a Russian parent can fund an Indian company: equity and preference share pricing, 60-day allotment and FC-GPR rules, ECB, loans, FLA return, the remittance route through banks acceptable to India and Russian clearance.
Read the guide →Sanctions, Banking and Payment Channels for a Russian Parent and Its Indian Subsidiary: Screening, Special Rupee Accounts and Bank Due Diligence
The practical gate for Russian investors in India: US, EU and UK sanctions screening, the 50% ownership rule, Indian bank due diligence, settlement channels including rupee vostro accounts, why non-dollar payments are not a safe harbour and a compliance checklist.
Read the guide →Sources
Last updated 26 October 2026. General information only, not legal or tax advice. Indian and Russian rules change often; confirm current requirements before acting.