India – Malaysia Tax Treaty
The India-Malaysia tax treaty caps withholding on dividends at 10% for portfolio investors and 5% for qualifying direct investment, and interest at 10%. Royalties are taxed at a uniform 10% across all categories. Private pensions are taxable only in the country of residence, with no withholding at source. This is one of 48 active treaties in India's network and one of 24 in Malaysia's. The general dividend rate of 10% compares to a median of 10% across India's network and 10% across Malaysia's.
Verified data
CBDT DTAA Collection (incometaxindia.gov.in) (Treaty list verified April 2026)
Withholding Rate Summary
Source: India Treaty Reference| Income Type | Treaty Rate | Statutory Rate (India) |
|---|---|---|
| Dividends (general) Portfolio investors | 10%saves 10% | 20% |
| Dividends (qualified) Beneficial owner is a company holding >= 10% of voting stock | 5%saves 15% | 20% |
| Interest Bank interest, bonds, loans | 10%saves 10% | 20% |
| Royalties (avg) Patents, copyright, know-how, film/TV | 10% | — |
| Pensions Private pension distributions | 0% | — |
| Social Security Government social security benefits | 0% | — |
“Treaty Rate” is the maximum withholding permitted under this treaty. The actual effective rate may be lower if domestic law provides a more favorable rate independently. “Statutory Rate (India)” shows the rate that applies when no treaty benefit is claimed. Qualified dividend rate requires: Beneficial owner is a company holding >= 10% of voting stock.
Dividends
The general dividend rate of 10% applies to portfolio investors. A reduced rate of 5% is available when beneficial owner is a company holding >= 10% of voting stock. Without the treaty, the statutory withholding rate on dividends is 20%.
Source: India Treaty Reference
Interest
Interest payments (bank interest, bonds, loans) are subject to 10% withholding under this treaty, compared to the 20% statutory rate. This represents a 10% reduction from the statutory rate.
Source: India Treaty Reference
Royalties
Royalty withholding rates vary by the type of intellectual property. This treaty distinguishes 4 categories, with rates ranging from 10% to 10%.
Source: India Treaty Reference
Pensions & Social Security
Private pension distributions are taxable only in the country of residence, with no withholding at source. Government social security benefits are exempt from source-country withholding.
Source: India Treaty Reference
Comparative Context
🇮🇳India's Network
Among India's 48 active treaty partners, the 10% general dividend rate ranks 18th (median: 10%).
| Partner | Rate |
|---|---|
| Japan | 10% |
| Luxembourg | 10% |
| Mexico | 10% |
| Malaysia (this treaty) | 10% |
| Netherlands | 10% |
| Norway | 10% |
| Poland | 10% |
🇲🇾Malaysia's Network
Among Malaysia's 24 active treaty partners, the 10% general dividend rate ranks 15th (median: 10%).
| Partner | Rate |
|---|---|
| Egypt | 10% |
| Hong Kong | 10% |
| Indonesia | 10% |
| India (this treaty) | 10% |
| Thailand | 10% |
| Australia | 15% |
| Canada | 15% |