All about Form 10F and its Filing Procedure

Introduction

Section 90(4) specifies that any person who is non-resident can take advantage of DTAA* with India if he obtains a Tax Resident Certificate (TRC)* from the tax authority of his residence country confirming his tax residency status in that country. The CBDT notified Rule 21B prescribing the additional information that is required to be furnished by non-residents along with TRC in prescribing Form-10F. If a non-resident wants to avail himself of the benefits of DTAA, he must file a self-declaration in Form 10F along with a TRC of their country of residence. For example, if a resident of the USA is providing royalty services to an Indian resident and the rate specified in the Income Tax Act for royalty is 20.8% (after HEC) and the rate specified for royalty in the DTAA between the USA and India is 10%, he can take advantage of the DTAA rate, i.e., 10%, if he files a self-declaration in Form 10F along with the TRC. If he does not file Form 10F, then he can't take advantage of DTAA, and the resident payer will deduct TDS at the rate of 20.8% (specified in the Income Tax Act). While the TRC obtained generally contains most of the information required, Form 10F is furnished by the non-resident taxpayer for the balance information as a matter of precaution. This form is digitally signed by non-residents and furnished along with TRC to resident payers for determining the TDS implication under Section 195 of the Income Tax Act.

Terms used above*

• DTAA: It stands for Double Taxation Avoidance Agreement. This is an agreement between India and other countries that prevents double taxation on income earned by both countries.
• TRC: It stands for Tax Residency Certificate. It confirms the tax residency status of non-residents, and it is mandatorily required to obtain it from the government if non-residents want to take advantage of DTAA, as mentioned above.

Documents Required for Filing Form 10F

• PAN card (not mandatory now, discussed below)
• Proof of residence address in your resident country, i.e., TRC
• Duration of residential status as stated in the TRC
• Taxpayer status (individual, firm, company, trust, etc.)
• Proof of nationality for individuals or registration for companies and firms
• Tax identification number or any other unique identification number in the country of residence
• A digital signature certificate (DSC) to authenticate the information furnished in Form 10F

Is it mandatory to file Form 10F online, and is a PAN card required?

Yes, Form 10F is mandatory to file online w.e.f. July 2022. However, one problem arises for foreign taxpayers: they generally don't have the PAN number, and without the PAN, they cannot log in to the e-filing portal for filing Form 10F. Therefore, the government allowed non-residents to file Form 10F offline until April 1, 2023, and further extended it until September 30, 2023. However, on October 1, 2023, the government made it mandatory to file Form 10F online. To overcome the problem of non-residents not having PANs, the government gave non-residents one option in which they could login to the e-filing portal without a PAN by providing some basic information (discussed below). Therefore, we can say that filing Form 10F online is mandatory, but now there is no mandatory requirement of a PAN for non-residents; they can login even without a PAN by following the process mentioned below.

How do I file Form 10F online for both the non-resident having PAN and the non-resident not having PAN?

If a non-resident does not have a PAN, then he will login to the e-filing portal by following the following process:

1. First, go to the e-filing portal and click on the option "Register" (near the option of Login).
2. Then select option 'Others' and choose category "Non-Residents not holding and not required to have PAN" and click on Continue.
3. Then, we will get the page where we need to provide the following information:

• Basic Details: Name, date of incorporation, tax identification number, and country of residence.
• Key Person Details: Name, date of birth, tax identification number, and designation.
• Contact details: primary and secondary mobile numbers, email IDs, and postal addresses.
• Attachments: ID proof, address proof, and a copy of the Tax Residency Certificate (TRC). The ID and address proofs must be valid documents in your country of residence.

On successful verification of these details, we will receive a user ID on the registration email, through which we can login to the e-filing portal.

1. After getting the user ID from the above process, or if a non-resident already has the PAN, he can login to the e-filing portal with the help of his user ID and password.
2. Then go to the e-file tab and select the option "Income Tax Forms."
3. Then, select the tab 'Person not dependent on any source of income' and choose Double Taxation Relief (Form 10F) in the search box.
4. Then, select the relevant 'Assessment Year' and click on continue.
5. Then, click on 'Let's Get Started' and provide the following information:

• Details of Authorized Signatory (Name, Father's Name): Auto-populated (form automatically picks the name of the person registered as a key person)
• Section of the Income Tax Act, 1961,1961 under which 10F is to be obtained (Section 90 or 90A).
• Status of the non-resident entity (individual, company, firm, etc.)
• Nationality (for individuals) or Country of incorporation or registration (for a company, firm, etc.)
• TIN, or unique number, from which a tax payer is identified by the government of the country in which it is incorporated or registered as a tax resident.
• Period for which TRC is obtained.
• Address of taxpayer in the country or territory outside India during the period of TRC.
• Address of the authorized signature.

6. Then we have to attach a copy of the TRC, and furthermore, we can proceed with e-verifying with the help of a digital signature certificate (DSC).
7. On successful verification of the above details, Form 10F will be successfully filed.

Conclusion

In conclusion, Form 10F is a crucial document for individuals and businesses involved in international transactions. It helps in claiming benefits under Double Taxation Avoidance Agreements (DTAA), ensuring that income isn't taxed twice in different countries. By providing accurate information and necessary documents like tax residency certificates, taxpayers can optimize their tax liabilities and comply with the law. Remember, timely and precise filing of Form 10F is essential for smooth international tax operations and avoiding potential disputes with tax authorities.