Form 10F

Form 10F

Section 195 of the Income Tax Act, 1961 pertains to the deduction of tax on payments made to non-residents. Payments to non-residents have procedural compliance attached to them. One such compliance on the part of the deductor is to obtain a certificate from a Chartered Accountant in Form 15CB and file Form 15CA on the basis of such a form.

Form 15CB certifies the details of remittance to be made outside India. For the issuance of Form 15CB, the most crucial document is the Tax Residency Certificate (“TRC”). TRC helps in determining the status of the payee and the taxability of the transaction under consideration. It is also essential to claim tax benefits under the Double Tax Avoidance Agreement (DTAA) between India and the respective country.

What is a valid TRC?

The certificate is issued in a foreign jurisdiction; hence, there can be no set format. A valid TRC should contain the following information:

• Status of the assessee (whether an individual, firm, company, etc.).
• Nationality (if the assessee is an individual) or country of incorporation/registration (if the assessee is other than an individual).
• Tax identification number of the assessee in the country of residence, or if no such number exists, a unique identification number recognized by the government of that country.
• Period for which the residential status, mentioned in the certificate under section 90(4) or 90A(4), is applicable.
• Address of the assessee in the country of residence as mentioned in the above point.

Applicability of Form 10F

Form 10F is required for non-residents to claim benefits under the Double Tax Avoidance Agreement. Rule 21AB of the Income Tax Rules, 1962, prescribes the information to be provided in Form 10F. This form is applicable when the TRC of a non-resident does not contain the information mentioned above.