Form W-8BEN is how a non-US person certifies foreign status to a US payer — typically a brokerage — and, where applicable, claims a reduced withholding rate under a tax treaty instead of the standard 30% NRA (nonresident alien) withholding that otherwise applies by default to US-source dividends, interest, and similar payments to foreign persons. Without a valid W-8BEN on file, the default is the full 30% cut taken at source before the money ever reaches you; the form itself goes to the broker or payer, not to the IRS directly.
What the India-US treaty actually gets you
Multiple secondary sources describe the India-US treaty as reducing the default dividend withholding to around 25% for portfolio holdings, with a lower rate reserved for larger corporate shareholdings — a scenario that mostly doesn't apply to individual NRI investors. Treat these as commonly cited figures to confirm against the current treaty text or a preparer rather than settled numbers, since treaty schedules are precise about article and paragraph.
Interest is a more nuanced case: much US-source interest paid to nonresident aliens — including most bank deposit interest and interest on US-registered bonds — is already exempt from withholding entirely under a separate 'portfolio interest' exception in US domestic law, regardless of any treaty. The treaty's reduced-rate figures mostly matter for interest that falls outside that domestic exemption, so it's worth not assuming every brokerage interest line item needs a treaty claim to begin with.
How the claim actually gets made
Part I of the form identifies you and your foreign tax residence; Part II is where the treaty claim itself lives — you cite the specific treaty article and paragraph, the income type, and the reduced rate you're claiming, so the payer's system can apply it correctly rather than defaulting to 30%.
The form doesn't last forever: commonly cited guidance says a W-8BEN signed at any point in a calendar year remains valid through December 31 of the third following year, and expires immediately regardless of that schedule if your treaty-relevant facts change — for example, if you become a US tax resident under the Substantial Presence Test.
If it lapses or was never filed
An expired or missing W-8BEN reverts withholding to the default 30% rate until a new one is filed. This is a withholding-rate problem, not necessarily a final-liability one — over-withheld amounts are generally recoverable by filing a US nonresident return (Form 1040-NR) and claiming a refund, but that's a slower path than simply keeping the form current with your broker.
This is a separate document from Form 8833, which discloses a treaty position on your actual US return. W-8BEN establishes the treaty rate at the point of payment; it doesn't substitute for the disclosure Form 8833 may separately require if the treaty position overrides standard US tax treatment.