EaseValueForeign founders model this wrong almost every time, and always in the same direction. They apply one rate — the corporate tax rate — and treat the rest as theirs. In reality the money crosses two taxing points on its way out of India. First the Indian company pays corporate tax on its profit, at roughly 25% to 35% depending on the regime it is on and its size. Then, when what is left is remitted to the parent as a dividend, tax is withheld again before the money leaves — at 20% plus cess under the Act, or at the lower ceiling in your tax treaty if you actually claim it. Stack the two and the combined Indian cost on distributed profit runs from roughly 29% to over 40%. This calculator shows the full waterfall in rupees: profit before tax, corporate tax, profit after tax, dividend declared, withholding, and what lands in the parent's account — plus the effective Indian rate on the profit you chose to distribute, and what you keep of every ₹100. It prices the Indian cost; your own country will usually tax the dividend too and give credit for the Indian tax, which is a separate calculation we are glad to walk through.
How it’s calculated
- Enter your Indian company's profit before corporate tax for the year. Everything on the page is expressed against that figure.
- Choose the corporate regime the company is actually on. The 22% concessional regime carries a flat 10% surcharge whatever the income, which gives an effective 25.168%. The 25% and 30% rates carry surcharge only above ₹1 crore of company income — 7% up to ₹10 crore and 12% above — and the calculator adds it from the profit you entered. Cess of 4% applies to all three.
- Set how much of the post-tax profit you intend to distribute. Profit you leave in India bears no further tax this year, but it is not permanently free — it is taxed when it eventually comes out, either as a dividend or as capital gain on your shares.
- Pick the withholding rate. Without a treaty claim it is 20% plus 4% cess. Most treaties cap dividend withholding lower — commonly 5%, 10% or 15% — and a treaty ceiling is not increased by surcharge or cess. But the treaty rate is not automatic: the Indian company needs your tax residency certificate and Form 41, the declaration formerly called Form 10F, before it remits.
- Read the effective rate against the profit you chose to distribute rather than against total profit. A low payout makes the headline rate look better while leaving the same tax to pay later, so measuring it this way is the honest comparison.
Frequently asked questions
If my Indian company makes ₹30 lakh, how much can I take home?
On the 22% concessional regime the company pays roughly ₹7.55 lakh of corporate tax, leaving about ₹22.45 lakh. Distribute all of it and, at a 10% treaty rate, about ₹2.24 lakh is withheld, so roughly ₹20.2 lakh reaches you — an effective Indian cost of about 33%. Without a treaty claim the withholding is 20.8% and you receive closer to ₹17.8 lakh. Enter your own figures above rather than relying on these, because the corporate rate and the treaty rate both move the answer materially.
Is a dividend the cheapest way to get money out of India?
Not always, and it is worth modelling before you decide. A dividend comes out of profit that has already borne corporate tax, so it is the fully taxed route. A service fee, royalty or interest paid to the parent is deductible to the Indian company, so it reduces Indian corporate tax — but it has to be genuinely at arm's length, it brings transfer pricing and the annual accountant's report with it, and it carries its own withholding and GST under reverse charge. Repayment of capital on a buyback or a share sale is different again. There is no single best answer; there is a best answer for your facts.
Why is tax withheld when I have already paid corporate tax?
Because India taxes the company on its profit and taxes the shareholder on the dividend, and they are different taxpayers. Until 2020 the company paid a distribution tax instead and the dividend was tax-free in the shareholder's hands; since then the dividend is taxable to the recipient, with tax withheld at source when it leaves India. It is genuine double taxation of the same economic profit, and the treaty rate plus the credit your home country gives are what soften it.
Does the treaty rate apply automatically?
No, and this is where money is lost. To withhold at the treaty rate rather than the Act rate, the Indian company must hold your tax residency certificate for the relevant period and Form 41 — the declaration previously called Form 10F, which is filed electronically. Each remittance also goes out with Form 15CA and, where required, a Form 15CB certificate from a chartered accountant. Where the paperwork is not in place the company must withhold at the Act rate, and recovering the difference means claiming a refund by filing an Indian return.
Is there any limit on how much profit I can send out?
No ceiling, provided the tax has been paid and the paperwork is in order. Dividends are freely remittable to a foreign shareholder under the exchange-control rules once Indian tax has been met. What is not permitted is moving cash out with no underlying transaction, or dressing a remittance up as something it is not.
What about my own country's tax?
This calculator prices the Indian side only. Most countries tax a foreign dividend received by a resident company or individual and give a credit for the Indian tax withheld — so if your home rate is above the Indian withholding, you top it up there, and if it is below, the credit may be partly wasted. Some jurisdictions exempt qualifying foreign dividends entirely. Since that decides what you actually keep, it is worth settling before the profit is distributed rather than after.
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