W-8BEN and W-8BEN-E form guide for Indians 2025

If you're an Indian freelancer earning from US clients, you've likely encountered the W-8BEN form. This IRS document determines how much tax gets withheld from your US income. Fill it incorrectly, and you could lose 30% of your earnings to withholding tax.

This guide walks you through completing the W-8BEN form correctly, explains when you need the W-8BEN-E version instead, and shows you how to claim tax treaty benefits under the India-US tax agreement.

What is the W-8BEN form?

The W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting) is an IRS form that foreign individuals use to:

• Confirm you're not a US taxpayer
• Claim reduced tax withholding rates under tax treaties
• Provide your tax identification details

Without this form, US clients must withhold 30% from your payments. With it, you can reduce withholding to 0-15% depending on your income type and the India-US tax treaty.

The form remains valid for three years from signing, after which you'll need to submit a new one. Why Indian investors need the W-8BEN form,

W-8BEN vs W-8BEN-E: which form do you need?

The IRS has two versions of the form. Using the wrong one can delay payments or cause form rejection.

Quick decision guide

Use W-8BEN if you:

• Work as an individual freelancer
• Get paid in your personal name
• File taxes as an individual in India

Use W-8BEN-E if you:

• Run a registered company or LLP
• Invoice clients through your business
• Have a GSTIN or business PAN

Have both individual and business income? You'll need to submit both forms. For example, if you freelance personally and also run a design agency, submit W-8BEN for personal work and W-8BEN-E for agency work.

W-8BEN vs W-9: understanding the difference

Another common confusion: should you fill W-8BEN or W-9?

The answer depends on your tax residency:

• W-9 (for US persons): US citizens, green card holders, US residents
• W-8BEN (for foreign persons): Indian residents, foreign nationals

If you're an Indian resident working from India, you always use W-8BEN, never W-9.

Why Indian investors need the W-8BEN form

Save money on dividend taxes

Without the W-8BEN form, you'll pay 30% tax on US stock dividends. That's a lot of money going to taxes instead of staying in your pocket.

With the form, Indian investors pay only 25% tax on dividends. Here's an example:

Without W-8BEN form:

• Dividend received: ₹10,000
• Tax paid: ₹3,000 (30%)
• You keep: ₹7,000

With W-8BEN form:

• Dividend received: ₹10,000
• Tax paid: ₹2,500 (25%)
• You keep: ₹7,500

You save ₹500 on every ₹10,000 in dividends!

Avoid double taxation problems

The India-US tax treaty protects you from paying taxes twice on the same income. The W-8BEN form activates this protection.

Without it, you might face complicated tax situations that cost you time and money.

No capital gains tax in the US

Good news: The US doesn't tax foreign investors on capital gains from stock sales. The W-8BEN form ensures you don't face any withholding when you sell your stocks.

However, you still need to pay capital gains tax in India on these profits.

How to fill the W-8BEN form: step-by-step guide

Here's how to complete each section:

Part I: Identification of beneficial owner

Line 1 - Name of individual: Enter your full name exactly as it appears on your PAN card. Use the same format throughout.

Example: RAJESH KUMAR SHARMA

Line 2 - Country of citizenship Write "India"

Line 3 - Permanent residence address: Enter your current residential address in India. Don't use a US address, PO Box, or in-care-of address here.

Example: Flat 402, Silver Oaks Apartment, MG Road, Koramangal, Bangalore 560034

Line 4 - Mailing address. If your mailing address differs from line 3, enter it here. Otherwise, check the box that says "same as above."

Line 5 - US taxpayer identification number Leave this blank. Most Indian freelancers don't have US TINs.

Line 6a - Foreign tax identifying number (FTIN) Enter your PAN number.

Example: ABCDE1234F

Line 6b - Check if FTIN is not legally required. Leave this unchecked. Indian residents must provide their PAN.

Line 7 - Reference number(s) Optional. Leave blank unless your client specifically requests a reference number.

Line 8 - Date of birth: Enter in MM-DD-YYYY format.

Example: 05-15-1990

Part II: Claim of tax treaty benefits

This is the most important section for reducing withholding tax.

Line 9 - Country Write "India"

Line 10 - Treaty article and explanation

This is where you claim reduced withholding under the India-US tax treaty. What you write depends on your income type:

For freelance services and consulting income: Write: "I am claiming benefits under Article 15 of the India-USA tax treaty for independent personal services. I am not a US resident, and the income is for services performed outside the USA."

For royalties (like licensing creative work): Write: "I am claiming benefits under Article 12 of the India-USA tax treaty for royalty income. The applicable withholding rate is 15%."

For business profits: Write: "I am claiming benefits under Article 7 of the India-USA tax treaty for business profits. I do not have a permanent establishment in the USA."

Understanding treaty articles

The India-US tax treaty has different articles for different income types:

• Article 15: Independent personal services (freelancing, consulting) - typically 0% withholding
• Article 12: Royalties and technical services - 15% withholding
• Article 7: Business profits - 0% withholding if no permanent establishment in the US
• Article 11: Interest income - 15% withholding

Most Indian freelancers claim Article 15 benefits.

Part III: Certification

Sign and date the form.

The form must be signed to be valid. Your signature certifies that:

• You're the beneficial owner of the income
• You're a foreign person
• The information is accurate

Electronic signatures: Digital signatures through DocuSign, Adobe Sign, or platform-integrated signatures (like Upwork's system) are acceptable. Standard typed signatures without validation may be rejected.

How to fill W-8BEN-E (for Indian businesses)

If you're submitting invoices through a registered business, you need W-8BEN-E instead of W-8BEN.

The W-8BEN-E form is longer (8 pages), but you only need to complete specific sections:

Part I: Identification of beneficial owner

Line 1: Your company's legal name as registered

Line 2: Select your business type:

• Corporation for Pvt Ltd companies
• Partnership for LLPs
• Disregarded entity for sole proprietorships

Line 3: Leave blank (Chapter 3 status)

Line 4: Business address in India

Line 5: Mailing address (if different)

Line 6: US taxpayer identification number (leave blank)

Line 7: GSTIN or business PAN

Line 8: Leave blank

Line 9a: Country of incorporation - India

Line 9b: Check "Yes"

Part III: Claim of tax treaty benefits

Check the box for "The entity identified in Part I is claiming treaty benefits..."

Line 14a: Write "India"

Line 14b: Write your treaty claim similar to the W-8BEN example, but reference your business structure.

Example: "ABC Digital Services Private Limited is claiming benefits under Article 7 of the India-USA tax treaty for business profits. The company does not have a permanent establishment in the USA."

Part XXIX: Certification

Sign and date as an authorised representative of the company.

Skip all other parts unless you have specific circumstances, such as US business operations or partnerships.

Tax implications every Indian investor should know

Understanding dividend taxation

When you receive dividends from US stocks, two countries want to tax you: the US and India.

In the US:

• Standard rate: 30% for foreign investors
• Treaty rate: 25% for Indian investors (with W-8BEN form)

In India:

• Dividends add to your total income
• Taxed at your income tax slab rate
• You can claim credit for US taxes paid

Example of dividend taxation

Let's say you receive ₹1,00,000 in dividends:

US tax (with W-8BEN form): ₹25,000 (25%) Amount you receive: ₹75,000

In India: If you're in the 30% tax bracket, you owe ₹30,000 in Indian taxes. But you can claim ₹25,000 as foreign tax credit. So you only pay ₹5,000 additional tax in India.

Capital gains taxation rules

In the US, No capital gains tax for foreign investors

In India:

• Short-term gains (less than 24 months): Added to your income, taxed at your slab rate
• Long-term gains (24+ months): 20% tax plus surcharge and cess

Record-keeping requirements

Keep detailed records of:

• All investment transactions
• Dividend payments received
• Taxes paid in both countries
• Currency conversion rates on transaction dates

This helps during tax filing season and if tax authorities ask questions.

Understanding FTIN (Foreign Tax Identification Number)

Part I of the W-8BEN form asks for your FTIN. This causes confusion because the term isn't commonly used in India.

For Indian residents, FTIN means your PAN (Permanent Account Number).

That's it. Just enter your 10-digit PAN in the FTIN field. Don't leave it blank or write "Not applicable."

Which version of the W-8BEN form should you use?

The IRS updates forms periodically. Using an outdated version can result in rejection.

Current version to use: October 2021 edition

Download the official form from IRS.gov only. Don't rely on cached versions from other websites or old PDFs saved on your computer.

Check the form footer for the revision date before filling it out.

Common mistakes to avoid

Filing the wrong form

Don't confuse W-8BEN with W-8BEN-E. The purpose of the W-8BEN-E form is for entities, not individuals.

Incomplete information

Missing information leads to form rejection. Double-check every field before submitting.

Forgetting to renew

The W-8BEN form expires after three years. Mark your calendar to renew it on time.

Not claiming treaty benefits

Always claim treaty benefits in Part II. This is where you get the reduced 25% tax rate.

Working with investment platforms

How Winvesta simplifies the process

At Winvesta, we understand that tax forms can be overwhelming. That's why we:

• Handle W-8BEN form preparation for you
• Send you the completed form for review
• Submit it electronically to the right authorities
• Remind you when it's time to renew

What to expect from your broker

Good brokers should:

• Provide clear W-8BEN form instructions
• Help you understand tax implications
• Process your form quickly
• Keep you updated on form status

Planning your US investments

Start with the basics

Before investing large amounts, understand:

• Tax implications in both countries
• Currency conversion costs
• Platform fees and charges
• Regulatory requirements

Consider professional help

For large investments, consider consulting:

• Tax advisors familiar with India-US tax treaties
• Investment advisors specialising in international markets
• Chartered accountants with international experience

Stay informed about changes

Tax rules change over time. Stay updated on:

• Changes to the India-US tax treaty
• New tax regulations in both countries
• Updates to form requirements

The W-8BEN form opens doors to better tax treatment for Indian investors in US stocks. It reduces your dividend tax rate from 30% to 25% and ensures you don't face unnecessary complications.

Remember, this form stays valid for three years, but you need to update it if your circumstances change. Whether you're just starting your US investment journey or you're a seasoned investor, getting this form right saves you money and hassles.

Take time to understand the process, fill out the form carefully, and keep good records. Your future self will thank you when tax season arrives and you're keeping more of your investment returns instead of losing them to avoidable taxes.