CBDT notifies particulars to be furnished to claim Tax Treaty benefits

The Finance Act, 2012 brought in a new condition through section 90(4) of the Income tax Act, 1961 (“the Act”) requiring non residents claiming relief under the respective Double Taxation Avoidance Agreement (“DTAA”) to produce a Tax Residency Certificate (“TRC”) from the Government of the foreign country/territory in support of the tax residency in the respective country. The TRC obtained had to contain certain details as prescribed by the Indian Government (the Government had separately notified the particulars which the TRC had to contain).

Given that different countries had their respective formats for issuing the TRCs, the above requirement of obtaining the TRC from the foreign country containing the prescribed particulars created considerable difficulty in obtaining the TRC from the foreign countries. Recognising this, the Indian Government, through the Finance Act, 2013 (“FA, 2013”), rolled back the condition that the TRC should contain the prescribed particulars and instead introduced an enabling section 90(5) in the Act to the effect that the non resident claiming DTAA benefits in India should separately provide the particulars as may be prescribed.

The Central Board of Direct Taxes (“CBDT”), Department of Revenue, Ministry of Finance, has now prescribed the particulars that need to be furnished by the non-resident claiming DTAA benefits in India. The particulars need to be provided in a newly notified Form 10F. The said particulars have been prescribed by amending Rule 21AB of the Income-tax Rules, 1962. These particulars will have to be provided even in respect of benefits contemplated under section 90A of the Act (tax treaty with specified associations). The particulars prescribed are –

- Status (individual, company, firm etc.) of the assessee;

- Nationality (in case of an individual) or country or specified territory of incorporation or registration (in case of others);

- Assessee's tax identification number in the country or specified territory of residence and in case 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 the specified territory of which the asseessee claims to be a resident;

- Period for which the residential status, as mentioned in the TRC, is applicable; and

- Address of the assessee in the country or specified territory outside India, during the period for which the TRC is applicable.

The above particulars prescribed are the same as those that had been prescribed earlier for inclusion in the TRC. To that extent, there is no change. The notification also says that if the TRC obtained contains any of the particulars now prescribed, there is no need mentioning the same details again in the Form 10F to be now provided. Form 10F has to be signed by the person claiming the DTAA benefit and there is no requirement to get the form certified by the Government of the foreign territory or country. The new Rule however requires the non-resident to maintain such documents as are necessary to substantiate the information provided in Form 10F. Such documents may be called for by an Indian income-tax authority if required