HomeBlogExpatriatesA great relief for Non-residents for filing Form 10F – Tax Residency Certificate

A great relief for Non-residents for filing Form 10F – Tax Residency Certificate

  • February 2, 2023
  • Posted by: CA Sudha G. Bhushan
  • Category: Expatriates
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The Government is in constant process of digitalising all the compliances in order to automate the compliance to the maximum extent possible. In July, 2022, taking ahead its aim of complete digitalisation made filing of Form 10F i.e. the Tax Residency Certificate (‘TRC’) online by invoking the powers conferred upon Central Board of Direct Tax (‘the Board”) in Rule 131 of the Income Tax Rules, 1962 (‘IT Rules’).

What is Form 10F – TRC?

The Tax Residency Certificate is to verify the country in which the assessee is a resident. It may be necessary when you have earnings from more than one country. While you may be tax citizen of one of them, your profit may be payable in both the country due to their particular internal laws. To evade giving tax on the corresponding income twice, you may take advantage of the Double Taxation Avoidance Agreement (DTAA) within the nations. Rule 21AB of the IT Rules provides for the manner in which Form 10F can be obtained. Tax Residency Certificate is an essential document to claim tax relief under an agreement referred to in Section 90 and Section 90A of the Income Tax Act, 1961 (‘IT Act’).

Digitalisation of Form 10F

The Board issued Notification 03/2022 dated 16th July, 2022 specifying list of forms which are required to be furnished electronically. Form 10F was also specified in the list of forms.

Challenge

There were few practical challenges faced by non-resident (NR) taxpayers not having Permanent Account Number (PAN) in making compliance as per Notification.

The electronic filing of Form 10F mandatorily required to have PAN. However, not all Non residents will have PAN in India thereby leading to practical difficulty in filing the form.

Relief to Non-Residents

Looking into the practical difficulties faced by the Non-resident and to mitigate the genuine hardship to such tax payers, the Board issued notification 03/2022 dated 12th December, 2022. The notification exempted from mandatory electronic filing of Form 10F till 31st March, 2023.

Such non resident tax payers may make statutory compliance of filing Form 10F till 31st March, 2023 in manual form as was being done prior to issuance of Notification 03/2022 making the compliance electronic.

Conclusion

Till 31st March, 2023, the non-resident tax payers not having PAN in India and willing to apply for Form 10F may make such application manually to the CBDT.

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