The Indian Finance Act, 2012 introduced the requirement of non-residents furnishing a Tax Residency Certificate (TRC) to avail benefits under the Double Tax Avoidance Agreement (DTAA) with India. It also provided that the TRC should contain particulars as may be prescribed by the government. This provision created a furore among foreign investors as it was not always possible to obtain all the particulars prescribed in the TRC from a foreign government. Realising this difficulty and bowing to pressure from the international investor community, the Finance Act, 2013 amended sections 90 and 90A of the Income Tax Act, 1961 (ITA) and dropped the requirement of the TRC having to contain the prescribed particulars. Instead, it was provided that every non-resident who wishes to claim any relief under DTAA has to furnish to the Indian tax authorities certain prescribed documents and information as may be notified, in addition to the TRC.
In pursuance of these powers, the Central Board of Direct Taxes (CBDT) has now issued a Notification (No. 57 of 2013, dated 1 August 2013), amending Rule 21AB of the Income Tax Rules, 1962 and prescribing a new Form 10F for mandatory particulars to be provided by the non-resident seeking to avail treaty benefits, in addition to the TRC. This alert summarises the amendments brought about by CBDT’s latest notification.
Notification issued by CBDT
The amended Rule shall come into force from 1 April 2013. The new Rule requires the non-resident seeking treaty benefits to furnish the following information:
- Status of the person seeking treaty benefits (i.e. individual, company, firm, etc.)
- Nationality (in case of individuals) or country or specified territory of incorporation or registration (in case of others)
- Tax identification number in the country or specified territory of residence or, if there is no such number, then a unique number on the basis of which the person is identified by the government of the country or specified territory
- Period for which the residential status, as mentioned in the TRC, is applicable
- Applicant’s address for the period for which the certificate is applicable
|