Don’t have PAN? File Form 10F manually

 

Don’t have PAN? File Form 10F manually

NRIs should check their Tax Residency Certificates too: If it has required details, submit it instead.

The Central Board of Direct Taxes (CBDT) has offered one-time relief to non-resident individuals (NRIs) who don’t, have a permanent account number (PAN) by allowing them to file Form 10F manually till March 31, 2023.

It July this year, the CBDT had issued a notification making it mandatory for non- resident taxpayers to file form 10F electronically on the income tax (I-T) e-filling portal if they wanted to claim the benefit of lower TDS (tax deducted at source). Income earned by an NRI in India is subject to TDS under the I-T Act, 1961.

Many non- residents taxpayers faced issues in filling Form 10F since the portal didn’t allow those who didn’t have PAN to file the form. Owing to the practical challenges  faced by them, the CBDT has issued the latest notification exempting  those who don’t have a PAN, and are not required to have one under the provision of the I-T Act, from the mandatory e-filling of Form 10F till March 31, 2023”.

What is Form 10F?

The government of India has signed the Double Taxation Avoidance Agreement (DTAA) with the government of foreign countries to help NRI taxpayer avoid paying double taxes on the same income in both the countries.

Form 10F (under Rule 21AB) must be filled to claim benefits under DTAA. This form provides specific information about an NRI taxpayer, such as nationality residential status, tax  identification number etc.”

 What is TRC?

The I-T laws require NRI taxpayer to provide a Tax Residency Certificate (TRC) to avail of DTAA benefits. If certain prescribed details are not available in the TRC, then the non-resident taxpayer is required to furnish additional document and information in Form 10F.

TRC is a certificate issued by the revenue authority of the NRI’s country of residence, certifying that the person is a tax resident of that country.

According to Indian I-T law, a non-resident person must obtain a TRC from the government of the country or the specified territory of which he claim to be a resident.”

Indian payers request the non-resident payee to provide them with a copy of the TRC.”On the basis of the TRC, the Indian payer can apply the beneficial provisions of the tax treaty to determine the non-resident‘s tax ability in India. The Indian courts have time and again emphasised the relevance of the TRC for a non-resident to claim treaty benefits.”

An NRI taxpayer’s TRC must have the following details for him to avail the benefits of DTAA: name, address , nationality, residential status for tax purposes, taxpayer’s status (individual , firm,etc.), Tax Identification Number (TIN) or any unique number  that identifies the person as a tax resident by that country’s government , and period for which the certificate is valid.

Use TRC in lieu of Form 10F

Use of Form 10F can be avoided if the required information is provided in the TRC.”Usually , nationality and the tax identification number are mentioned. If the status, period of validity , and address are also mentioned on the TRC, then submitting Form 10F is not required.”

“TRCs issued by the revenue authorities of some of the popular destinations that invest substantially in India (like Mauritius and Singapore) contain the prescribed particulars. Non-resident form those countries may not be required to provide Form 10F.”

What should you do?

Non-resident taxpayers who need to use Form 10F to avail DTAA benefits should file it manually by March 31, 2023. They should use the time window provided by the tax authorities to apply for and obtain PAN.

Non-resident taxpayers may be required to substantiate information they provide in Form10F. Have the relevant documents ready in case the tax authorities demand them.

ESSENTIAL POINTS:

DTAA is a tax treaty signed between countries to help taxpayers avoid paying double taxes on the same income

It becomes applicable when an individual is a resident of one nation but earns income in another

DTAA provisions apply to income from services provided and salary received in India.

If an NRI makes use of DTAA provisions, then tax is deducted at a lower rate on the above –mentioned incomes.

For More Details: Pooja Manoj Gupta, visit www.giia26.com
Email: pmgiia26.com Mobile 8882286639