The 60-second version
Section 196C requires 20% TDS on income from securities (other than dividends) of FIIs investing in India — relevant when tracing FII flows on your cap table or portfolio.
196C is FII/QFI lane — retail NRI equity uses 195/196D
Section 196C applies to income from securities (other than dividends) paid to Foreign Institutional Investors and qualified foreign investors purchasing in foreign currency.
Retail NRI portfolio more often hits Section 195 capital gains TDS or 196D dividends — know which section applies.
PIS lane: NRI equity guide.
FII/NRI TDS matrix
| Section | Rate | Payer |
|---|---|---|
| 196C | 20% | FII securities income |
| 196D | 20% | FII dividends |
| 195 | Treaty+ | NRI remittance |
| 196A | 20% | NRI mutual funds |
Trace applicability
Identify investor
FII vs retail NRI.
Income type
Securities vs dividend.
TDS cert
From custodian.
Form 67
Treaty if applicable.
Flow
196C kit
- Custodian stmt.
- TDS cert.
- 26AS.
- Form 67.
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Retail NRI
If you are not FII/QFI, 196C does not apply — use 195/111A/112A.
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Turn this guide into a decision file
0 of 4 checked
Retail NRI stock?
Section 195 on sale — not 196C.
FII dividend?
Section 196D — not 196C.
Startup FII investor?
196C on their India securities income — not your filing.
DTAA?
FII claims via Form 67.
vs 196B?
196B offshore funds; 196C FII India securities.
Become resident?
Different rules on global income.
Your tax year is already running.
RNOR status, exit timing, and DTAA benefits all depend on decisions you make before you land. Don't guess.