Residuary withholding tax applies to taxable non-salary payments to non-residents, with no threshold and extended payer obligations.

Section 393(2), Serial No. 17 imposes withholding tax on interest not covered by specified categories and other taxable non-salary sums paid to a non-resident other than a company or a foreign company. Any payer must deduct tax at rates in force, without a payment threshold. Deduction generally arises at the earlier of credit or payment. Interest paid by the Government, a Public Sector Bank or a qualifying Public Financial Institution is subject to deduction only upon actual payment. The obligation also applies to non-resident payers irrespective of their presence in India.

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