Form 10F for Non-Residents: Form 10F is a self-declaration tax form used by non-resident (NR) taxpayers for claiming the benefits under DTAA (Double Taxation Avoidance Agreement) if their Tax Residency Certificate (TRC) lacks certain crucial details. its validity is limited to the financial year in which it is submitted
The form 10F online comprises two sections. The initial section contains a statement made by the non-resident or foreign entity, while the subsequent section entails certification by the tax authority in the resident country.
Purpose and Importance of Form 10F
According to Form 10F, people in India who are employed and want to take advantage of tax treaty benefits have to provide certain information on the form. In addition, they might require a Tax Residency Certificate in accordance with sections 90(5) and 90A of the Income Tax Act of 1961. India has made sure that income is only taxed once by entering into Double Taxation Avoidance Agreements with many other nations. As a result, non-residents are required to file Form 10F in the prescribed format to the entity in charge of withholding tax at the source, along with a mandatory TRC and self-declaration.
When a non-resident attempts to apply for DTAA benefits and is liable for paying their taxes in India, the TRC becomes involved. The non-resident must be determined to be eligible to be treated as a tax resident of the nation in question by the Income Tax Authority (ITA). Indian Tax Authorities may make a request to verify the TRC. The non-resident gets it from the national government of their nation. This indicates that India and a foreign nation have established the DTAA.
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Documents Required for Filing Form 10F
- PAN card
- Proof of residential address in your resident country
- Duration of residential status as stated in the TRC
- Taxpayer status (individual, company, firm, trust, etc.)
- Proof of nationality (for individuals) or territory of incorporation or registration (for companies and firms)
- TIN or any other unique tax identification number in country of residence
- Digital signature certificate to authenticate the information furnished in Form 10F
Things to Remember About Form 10F
- To claim benefits under Double Taxation Avoidance Agreements (DTAA), Form 10F income tax is commonly utilised. Ensure you fulfil the qualifying requirements listed in the applicable tax treaty.
- Permanent Account Number (PAN) is frequently required when completing Form 10F.
- Provide precise data in Form 10F to prevent errors or delays in processing your tax-related activities. Make sure your PAN is current to submit successfully.
- Before submitting, ensure all the information is accurate and complies with all applicable tax laws and treaty terms.
- You might also need to submit a Tax Residency Certificate (TRC) with Form 10F depending on your circumstances.
How to File Form-10F Online?
As mentioned above, taxpayers need to file Form 10F on the income tax e-filing portal. Here is a step-by-step guide to file Form 10F:
Step 1: Log in to the official e-filing portal with with your PAN or the user ID. Register if you do not have an account.
Step 2: On the dashboard, navigate to the ‘e-File’ menu and select ‘Income Tax Forms’.
Step 3: Click on ‘File Income Tax Forms’.
Step 4: On the next page, select the 3rd tab ‘Person not dependent on any source of income’.
Step 5: You will find the option to file Form 10F in the last column on this page. Click on ‘File Now’.
Step 6: Enter your PAN and select the assessment year from a dropdown menu. Click on ‘Continue’.
Step 7: Go through the given instructions and click on ‘Lets get started’.
Step 8: Enter the required details, including your name, father’s name, Section 90/90A, country of registration/residence, TIN, etc.
Step 9: Next, select the period for which you obtained the TRC and your address outside India.
Step 10: After filing the other details, you need to attach a copy of your tax residency certificate.
Step 11: Signing of the form can be done via digital signature or electronic verification code.
Step 12: Click on ‘Preview’ to review the details and submit the form.
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Consequences of Not Filing Form-10F
The Form 10F is necessary to claim the benefits of India’s tax treaties with foreign countries. non-compliance with the Form 10F requirement will result in the withdrawal of DTAA benefits given to a taxpayer. As said before, a higher rate of TDS is applicable to those who have not filed this form-10F.
If you don’t furnish Form 10F, there are also tax and legal repercussions to consider. If an NRI taxpayer applies a reduced tax rate or nil tax liability without having filed the form, he will be treated as an ‘assessee in default’. This would also make remittances difficult as non-residents need to comply with documentation requirements to maintain accounts.
In order to ease out the above challenges, the CBDT came up with certain relaxations. An exemption was provided whereby non-residents not having PAN and not required to obtain PAN in India can furnish self-certified Form 10F manually till 30th September 2023. As this exemption has expired, the income tax department released a whole new category for registration on the income tax portal – ‘non-residents not having PAN and not required to obtain PAN’. This will allow non-residents to file Form 10F without PAN.
Thus it is essential that a foreign company should file Form 10F, do not only reduce the amount of taxes that are paid within India, but also to reduce their recurring compliance of providing Form 10F for every transaction in India, to different customers during the year. This is not only expedite the process of payment, but also reduces compliance burden for companies doing regular transaction with India.
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