Reduction of withholding tax rate on "royalties" and "fees for technical services" (FTS) With regard to royalties/FTS arising in a state and paid to a resident of the other state, the protocol provides that the tax in the source state shall not exceed 10%, if the recipient is the beneficial owner of such royalties/FTS. The Indian Income Tax Act 1961 (ITA) has been recently amended to reduce the domestic withholding tax rate on royalties/FTS to 10%. However, the reduced rate under the tax treaties would still be beneficial due to the surcharge and education cess that is imposed under the...