What is Form 10F and How to Download and Fill Form 10F Online?

An individual, company, or entity staying abroad is eligible to take advantage offered by the DTAA (Double Taxation Avoidance Agreement). NRIs can claim the benefits of the DTAA, which is an agreement between India and another country under which their income will be taxed only once. This agreement avoids the burden of double taxation. However, to claim these benefits, you must familiarize yourself with the Form 10F. Completing Form 10F is vital for an NR, business, or any other entity that is conducting operations in India while being situated somewhere else. It is an important document that guarantees the use of lower tax rates or exceptions offered by the applicable DTAA for any income that is accrued in India. In this guide, we will learn more about the Form 10F, its purpose, eligibility, documents, and everything that you need to know.

What is Form 10F?

The Form 10F is a self-declaration form utilized by an NR (Non-Resident) taxpayer for availing all the benefits under the DTAA (Double Taxation Avoidance Agreement) if their TRC (Tax Residency Certificate) lacks any specific crucial information. Now, let's understand all these terms briefly:

• NR Taxpayer: An individual or entity whose main source of income is from abroad and not India.
• Double Taxation Avoidance Agreement (DTAA): It is an agreement signed between India and other countries that prevents an individual from paying taxes twice on the same income earned in both countries.
• Tax Residency Certificate (TRC): It is a document issued by an NR taxpayer's home country confirming their tax residency status. An NR taxpayer has to get a valid TRC in order to claim the benefits of the DTAA provision.

What are the Benefits of Filing Form 10F?

Filing Form 10F helps an individual ensure accurate tax calculations and avoid any kind of delays. It makes sure you comply with the Indian tax regulations and fulfill all the requirements that have to be followed to claim the benefits of the DTAA provision. Filing Form 10F will also help you to avoid higher rates of tax on various sources of income, such as dividends, interest, and royalties.

Why Do You Need Form 10F?

If the Tax Residency Certificate doesn't include all the required information according to the DTAA, then the NR taxpayer needs to mention the extra details in Form 10F. The purpose of Form 10F for non-resident taxpayers is as follows:

• Avoid Paying Tax Twice: The DTAA provision was introduced to prevent individuals from paying taxes twice on the same income. It means paying tax once in India and once in their home country. The Form 10F helps to ensure that an NRI is not liable to double taxation; it acts as a shield for them.
• Availing Tax Treaty Perks: The main function of Form 10F is to claim the tax treaty benefits. To claim the advantages offered by the DTAA between India and your country of residency, you need to fill out Form 10f. These benefits might often lower tax rates or even provide complete exemption from withholding tax on income that is earned in India.
• Proof of Tax Residency: The Form 10F will also act as proof of your tax residency status wth the Indian tax authorities. The TRC (Tax Residency Certificate) that you are required to submit along with Form 10F becomes a vital form of evidence in this aspect. Knowing about your residency will help you understand your tax liability in India and make sure that you are not being taxed on your worldwide income.
• Providing Additional Details: If some details are missing in the TRC, an individual has to furnish Form 10F according to Section 90 (5) of the Income Tax Act. A TRC must contain specific details, such as the taxpayer's name, foreign address, TIN (Tax Identification Number), etc. In case the TRC doesn't contain all of this information, then the individual is required to digitally file the Form 10F.

Here's How It Works Together: When you submit Form 10F along with your TRC, you prove your residency status as well as avail the benefits that you are eligible to claim under the DTAA. This mixed approach makes sure that you pay tax only on the Income that is earned in India, and that too according to the approved rules of the tax treaty, ensuring you save a significant amount on taxes.

What is a Tax Residency Certificate, and Who Needs One?

A tax residency certificate helps the income tax department confirm an individual is a tax resident of a country for a specific financial year. A person's residency status will be determined based on the location where they earn their income or perform their services. The NRI may have to submit a TRC to their host country's government, along with a foreign national who is receiving an income in India, also has to file a TRC.

An individual who has received income from a country that has a DTAA signed with the Indian Government has to get a TRC (Tax Residency Certificate). Obtaining a TRC is mandatory for an NRI who is subject to taxation in India and wishes to avoid additional taxes on their income in two countries. The government has made obtaining a TRC mandatory for Indians as well to claim the benefits of the DTAA provision.

To get a TRC certificate in India, you are required to qualify as a resident and get two types of Form 10F, which are as follows:

• Form 10FA: It is used by Indian residents to get a residency certificate following the terms of Section 90 (5) and Section 90 (A) of the Income Tax Act.
• Form 10FB: Once your details are verified by the concerned assessing officer, you will get a residency certificate via Form 10FB.

To obtain a TRC, a non-resident must follow the process provided by their host country's government. Keep in mind that the document will remain valid for one financial year.

Who Is Eligible to Fill Out Form 10F?

The Form 10F is an important document for NRIs who don't have all the required details of the TRC. Form 10F is required to be filled by all non-resident taxpayers, including the following:

• Companies: If any foreign company operating in India wishes to claim the benefits of DTAA on income earned in India, even without a permanent establishment, then they are required to file Form 10F.
• Individuals: Any freelancers or consultants offering services remotely, a foreign citizen working in India, or an individual getting income from Indian investment, such as through dividends or interests, need to fill out Form 10F.
• Other Entities: It can include any non-resident entity, like trusts, associations, or partnerships that receive income from India and claim tax treaty benefits.

The eligibility to fill out Form 10F is primarily decided by the nature of the income, the existence of a DTAA, and particular provisions of the DTAA. Filing Form 10F allows an NRI to avoid TDS (Tax Deducted at Source) on income that is earned in India, helping them to save a significant amount, as all of their income is liable to TDS. Furthermore, the TDS will be deducted at a higher rate if the individual doesn't have a PAN card.

Recent Modifications for PAN Requirements

Previously, NRI taxpayers who didn't have a PAN card (Permanent Account Number) also had to file Form 10F manually, requiring every taxpayer to acquire a PAN first, as there were no other options to log in to the Income Tax e-filing portal without the PAN. However, a crucial modification was introduced for FY 2023, in which the CBDT (Central Board of Direct Taxes) permitted a one-time relief to the taxpayers who didn't have a PAN. Now, they can electronically file Form 10F, regardless of the matter whether they hold a PAN or not, aiming to make the process easier and ensure transparency for every individual.

What are the Documents Required for Filing Form 10F?

To experience a smooth online Form 10F filing process, it is important to have the following documents ready in advance:

• PAN card
• Status of the taxpayer (individual, company, trust, firm, etc.)
• Duration of residential status as mentioned in the TRC.
• Residential address evidence in your home country
• A digital signature certificate to verify the information stated in Form 10F
• TIN or any other unique tax identification number in your residence country
• For individuals, evidence of nationality, and for companies and firms, the territory of incorporation or registration.

What are the Other Requirements for Filing Form 10F?

An NRI or a foreign entity has to fulfill the following requirements in order to file Form 10F successfully.:

• Accurate and Complete Form: One must file Form 10F with only accurate and complete information. Provide all the information that is requested by the Indian tax authorities to ensure a smooth process and to claim the benefits without any potential issues.
• Tax Residency Certificate (TRC): An NRI may have to provide a TRC issued by the tax authority of their home country. It will verify their tax residency status and will help them determine the DTAA's applicability.
• Valid DTAA: A DTAA (Double Taxation Avoidance Agreement) must be in effect between India and the NRI's home country, helping to specify the tax benefits that are available to an NRI.
• Income Taxable in India: The NRI or the foreign entity must have some source of income that is liable to income tax in India, such as income from a business, employment, investment, or any other.

Is It Compulsory to File Form 10F Online, and Do I Need a PAN Card For the Same?

Previously, filing Form 10F digitally was necessary to claim the tax treaty benefits. This requirement created a problem for foreign companies that didn't have a PAN because they required one to register themselves on the Income Tax portal and file the form 10F.

However, now, non-residents can register themselves on the Income Tax Portal without a PAN card. Hence, a PAN card is no longer required to file Form 10F electronically. They can now register and file Form 10F online by providing the information mentioned below:

• Basic Details: Name, incorporation date, country of residence, and tax identification number.
• Details of the Key Person: Name, birth date, designation, and tax identification number.
• Contact Details: Postal address, email IDs, primary and secondary mobile numbers. 
• Attachments: Proof of address, ID proof, and a copy of your tax residency certificate (TRC). The ID and address proof must be considered valid in your country of residence.

Once all this information gets verified, you will get a user ID on your registered email address. You can use this ID to log in to the Income Tax Portal. After submitting your TRC, you can upload Form 10F online and verify it through OTPs.

How to File Form 10F Online for NRIs?

Follow the steps mentioned below to file Form 10F electronically as an NRI:

Step 1: Visit the e-fling Web Portal

Navigate to the e-filing web portal online and click on the "register" button. You can find this at the upper-right-hand corner of the webpage.

Step 2: Choose the Category for NRIs

Click on the "Others" option. Now, from the provided list of choices in the drop-down menu, click on the "Non-residents not holding and not required to have PAN" option.

Step 3: Fill in the Required Information

Provide all the necessary details, such as your full name, incorporation/birth date, tax identification number, and country of residence.

Step 4: Provide Details About the Key Person

Now, fill in the relevant details related to the key person, including their full name, birth date, designation, and tax identification number.

Step 5: Contact Details

Provide the key person's contact details as well as a secondary email and contact details. Remember that you will get a one-time password (OTP) on your primary mobile number and email ID, which will be mandatory for verification. Also, add the company's postal address.

Step 6: Verification Through OTP

You will receive an OTP (One-Time Password) on your registered email address and primary mobile number. You need to enter that for verification.

Step 7: Document Submission

Attach all the required documents, such as the TRC (Tax Residency Certificate), and any other necessary documents.

Step 8: Submit the Form

Once you have successfully completed all the previous steps, you can now submit your form further.

What are the Effects of Not Filing Form 10F?

The Form 10F is important to claim the benefits of India's tax treaty with other foreign countries. Not complying with the requirements of Form 10F will result in the withdrawal of DTAA benefits provided to a taxpayer as per the notification of the government dated 16th of July, 2022. Also, for those who haven't filed this form, a higher rate of TDS will be applicable.

Additionally, there might be some tax and legal repercussions as well if you don't file Form 10F. Without filing the Form, if an NRI mentions a reduced tax rate or NIL tax liability, they will be deemed as a "taxpayer in default", making the transfers difficult, as non-residents are required to adhere to the documentation requirements to maintain their accounts in India. Ideally, an NRI must have a valid PAN card to file Form 10F online and claim the TDS deductions at a reduced rate.

To Conclude

Filing Form 10F gives NRIs the option to avoid paying taxes on the same income twice in two countries. Additionally, this form also allows them to claim various tax exemptions and deductions that are available for an NRI under the Income Tax Act. If you are also seeking help with filing Form 10F, the tax experts at Savetaxs can assist you with filing Form 10F while adhering to all the requirements.

Our team will make sure that you experience a smooth process from start to end. Doesn't matter what time it is; if you are struggling with any tax-related issues, you can connect with us, as our team is actively working around the clock for all time zones.