According to Section 90(5) of the Income Tax Act, a non-resident must provide specific information in Form 10F along with the Tax Residency Certificate (TRC) in order to claim the benefits of any Tax treaty in respect of any income earned in India. This benefit may be claimed at the time of tax withholding by providing certain documentation, as well as when the non-resident deductee files their income tax return.
Rule 21AB of the IT Rules provides for the details to be furnished in Form 10F as follows:
Status (Individual, Company, Firm, etc) of the assessee;
Permanent Account Number (PAN)* of the assessee
Nationality (in case of an individual) or Country or specified territory of incorporation or registration (in the case of others);
Tax Identification Number of the assessee, in the country of Residence or Unique Tax Identification Number;
Period for which residential status is applicable;
Address of the assessee in a country of residence.
The option to electronically file the mandatory Form 10F via the Income Tax e-filing portal is now available from 16th July 2022.
Form 10F would now be required to be filed via the e-filling account of Non-resident on Income Tax e-filing portal. The non-resident assessee (deductee) would be required to furnish Form 10F through the e-filing portal by following the below steps. It may kindly be noted that for log-in to the income-tax portal, PAN is mandatory:
On e-file tab, select ‘Income Tax Forms’ and then click on ‘File Income Tax Forms’
Select ‘Persons not dependent on any Source of Income (Source of Income not relevant)’
Select Form 10F from the list of forms available
Select the relevant Assessment Year (AY)** in the tab and click on ‘Continue’.
The assessee would be required to furnish the required details (as mentioned in Para 1.2 above) and mandatorily attach a copy of TRC.
Signing of Form 10F can be done either through digital signature, (usually if the return of income is required to be furnished under digital signature) or through electronic verification code in accordance with Rule 131 of the IT Rules.
2. In accordance with Rule 37BC of the IT Rules, payments such as interest, royalties, fees for technical services, dividends, and payments on the transfer of any capital asset would not be subject to the higher rate of tax at 20% in cases where PAN was not obtained, so long as the deductee provided certain information, such as name, e-mail address, contact information, address in the tax resident country, TRC, Tax Identification Number or Unique Identification Number, etc. To the contrary, now that electronic filing of Form 10F is mandated, every assessee must submit that document through the portal. In this regard, the non-resident would be compelled to acquire a PAN and, if necessary, a digital signature (DSC).
3. The IT Department notification is effective from 16 July 2022 and accordingly, the electronically filed Form 10F needs to be furnished for AY 2023-24 by the non-resident deductee. However, considering that the option to e-file the Form 10F was enabled for AY 2022-23 also, we expect a clarification on the requirement for furnishing of electronically filed Form 10F in case of the remittance made in FY 2021-22 (AY 2022-23) as well as for treaty relief claimed/to be claimed in the Return of income for AY 2022-23. We also need to understand whether the remittances made on or before 16th July 2022 would be subjected to this new requirement.