India has signed DTAA( Double tax avoidance agreement) with many countries with which the person who have the tax resident certificate from the country of working can avail the tax exemption in india. Tax resident certificate is must for claiming the tax exemption in India under DTAA scheme.
India has so far singed DTAA with almost 80 countries under section 90 of income tax act. DTAA is the agreement between the two countries as tax will not levy twice on the same income.
But tax resident certificate was the major issue earlier as Indian government had fixed some information must for accepting it a tax resident certificate. Whereas other countries have their own style and may not contain all information which is required by Indian government.
So this issue blocks the individual for claiming exemption under DTAA scheme.
In finance act 2013, government of India has retain the TRC norms , the TRC issued by the other country need not necessarily contain the prescribed details. Instead, non-residents are required to provide certain information to be prescribed. On August 1, the CBDT has prescribed the format in which such additional information needs to be provided by the taxpayer in Form 10F.
These details are similar to those required as part of the TRC under the earlier provisions, such as PAN (if allotted), nationality, tax identification number in the country of residence, etc. However, if such details are already provided in the TRC, they may not be required to be provided by the taxpayer again in Form 10F.
This flexibility granted to non-resident taxpayers to provide a TRC issued by the country of treaty residence without necessarily following a specific format and supplemented by additional details by way of a self-declaration is a welcome move.
Download Form 10F.
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