Tax Residency Certificate

When an individual or an entity enters into a cross boarder transaction with a foreign resident, the income earned may end up paying tax twice, i.e. in the country of residence of the tax payer and in the country where the income is earned. In order to provide relief from being taxed twice for such taxpayers, Governments enters into Double Taxable Avoidance Agreement with the governments of other countries. For getting relief mentioned under DTAA’s, a taxpayer needs to get a TRC which proves his / its tax residency in the county of his residence in front of the foreign tax authorities.

Tax Residency Certificate is a certificate issued by the Income Tax Department to the Indian Residents who earn income from countries with which India has a Double Taxable Avoidance Agreement (DTAA) Double Tax Avoidance Agreements.

An application for obtaining TRC needs to be done in Form 10F/10FA to the Jurisdictional Assessing Officer. In case, the Application is made by a person resident in India, the applicable form is Form 10FA. In case of a non-resident, it shall be in Form 10F.

Assessing Officer on receipt of such application along with all information mentioned above, being satisfied in this behalf issues a TRC in Form 10FB. TRC certificate once issued, remains valid till the end of the financial year.

The certificate is submitted to the payer (that is a foreign entity with whom the transaction is entered into) so that the foreign entity may pass on the benefits under DTAA to the Indian Residents.

Information required to obtaining TRC: An application for obtaining TRC needs to be done in Form 10F/10FA to the Jurisdictional Assessing Officer. The information required in Form 10F/10FA is:

  • Status (individual, company, firm etc.) of the taxpayer
  • Nationality or country of incorporation
  • Unique Identification Number from which the Government of taxpayer’s resident country identify the taxpayer (example- Certificate of Incorporation or Aadhaar)
  • Period for which the residential status, as mentioned in the certificate is applicable
  • Address of the assessee in the country or specified territory outside India, during the period for which the certificate is applicable.

Please contact us in case you want to obtain a Tax Residency Certificate.