Finance Bill: Withholding tax on royalty and technical fee doubled to 20%

The Centre has decided to double the withholding tax on royalties and fees paid for technical services provided by non-resident firms. The withholding tax has been increased from 10 per cent to 20 per cent.

The decision is part of the 64 amendments introduced through the Finance Bill 2023. Finance Minister Nirmala Sitharaman presented the bill in the lower house on March 24. It will now be tabled in the Rajya Sabha for its approval.

What is withholding tax?

Indian subsidiaries of multinational companies (MNCs) remit substantial amounts of money in the form of royalties or fees for technical services to their non-resident