When a non-resident earns interest income on deposits, the banks are required to deduct tax at source (TDS) at the rate of thirty per cent under Section 195 of the Income Tax Act. The TDS rate shall be further increased by applicable surcharge and Health and Education cess. It is to be noted that if the tax rate is lower under DTAA, the tax shall be deducted at such rate. 

(Refer to the First Schedule of the Finance Act to get the TDS rates)