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How to Obtain India’s Tax Resident Certificate in Form 10FB

India’s Tax Resident Certificate, also known as the TRC, is a crucial document that allows Indian citizens to avail tax relief under the Double Taxation Avoidance Agreements (DTAA). It is issued by the Income Tax Authority of India to individuals who are considered residents of the country for tax purposes. In this article, we will explore the various aspects of the Tax Resident Certificate and provide a step-by-step guide on how to obtain it using Form 10FB.

What is the Tax Resident Certificate (TRC)?

The Tax Resident Certificate is an essential document required to avail tax relief under the DTAA. It is issued by the individual's home country, in this case, India, to certify their tax residency status. The TRC is then furnished to foreign countries with which India has a DTAA agreement. It allows individuals to either avoid Tax Deducted at Source (TDS) deduction by foreign tax authorities or claim a tax refund by filing a tax return in the foreign country.

To be considered a resident of India for tax purposes, an individual must meet one of the following criteria:

  1. Stay in India for 182 days or more in the financial year.
  2. Stay in India for 60 days or more in the current financial year and have stayed in India for 365 days or more in the four preceding years. (For Non-Resident Indians, the 60-day requirement is replaced with 180 days.)

For example, if Mr. Nitin, a project manager, visits Singapore for eight months during the financial year 2017-18 and stays in India for the remaining four months, he will be considered an Indian resident for tax purposes if he had stayed in India for 365 days or more during the financial years 2016-17, 2015-16, 2014-15, and 2013-14.

Types of Foreign Incomes Covered by DTAA

The DTAA applies to various types of foreign income. Some of the key categories include:

  1. Interest on fixed deposits
  2. Interest on savings bank accounts
  3. Capital gains earned in a foreign country
  4. Salary received in a foreign country

It's important to note that the DTAA helps in avoiding double taxation on these foreign incomes by allowing individuals to pay taxes at a concessional tax rate as per the agreement between India and the foreign country.

How to Obtain India’s Tax Resident Certificate (TRC) using Form 10FB

Obtaining India's Tax Resident Certificate involves a manual process that requires a visit to the Assessing Officer's (AO) office. Here is a step-by-step guide on how to obtain the TRC using Form 10FB:

Step 1: Locate Your Assessing Officer (AO) Online

To begin the process, you need to locate your Assessing Officer (AO) online through the e-filing website. Enter your Permanent Account Number (PAN) and registered mobile number to find the contact details of your AO. This information is usually available in the left corner of the page under the tab "Quick Link."

Step 2: Prepare Documentation of Your Movement In and Out of India

Prepare a document that explains your movement in and out of India. This document should include details of your stamped passport, including entry and exit stamps. If you have used electronic check-in or check-out through smart gates, save your air tickets as evidence. Calculate the number of days you spent in foreign countries and clearly state your stays in India for the remaining days in the financial year.

Step 3: Download and Fill Form 10FB

Download Form 10FB from the official Income Tax Department website. This form is specifically designed for obtaining the Tax Resident Certificate. Fill in the form with the required information, including the purpose of the TRC. For example, you may state that the certificate is needed to release the deducted tax amount from salary income earned abroad. Attach a photocopy of your passport and mark all the arrival and departure stamps, as mentioned in Step 2.

Step 4: Submit the Form to the Assessing Officer (AO)

Physically submit the filled-up Form 10FB, along with the supporting documents, to the Assessing Officer (AO). The AO may ask you to visit their office for further discussion and verification of the application. It is essential to satisfy the AO's requirements and provide any additional information or clarification they may need. Once satisfied, the AO will issue the Tax Resident Certificate in Form 10FB.

Conclusion

The Tax Resident Certificate (TRC) is a crucial document for Indian residents who want to avail tax relief under the Double Taxation Avoidance Agreements (DTAA). By following the step-by-step process outlined in this article, individuals can obtain the TRC using Form 10FB. With the TRC, they can avoid double taxation on their foreign income and ensure compliance with the tax laws of both India and the foreign country. It is essential to carefully follow the process and provide all the necessary documentation to obtain the TRC successfully.

Remember, the Tax Resident Certificate is specific to each individual and their unique tax situation. It is advisable to consult with a tax professional or seek guidance from the Income Tax Department for personalized assistance and accurate information.

 

author

The Tax Heaven

Mr.Vishwas Agarwal✍📊, a seasoned Chartered Accountant 📈💼 and the co-founder & CEO of THE TAX HEAVEN, brings 10 years of expertise in financial management and taxation. Specializing in ITR filing 📑🗃, GST returns 📈💼, and income tax advisory. He offers astute financial guidance and compliance solutions to individuals and businesses alike. Their passion for simplifying complex financial concepts into actionable insights empowers readers with valuable knowledge for informed decision-making. Through insightful blog content, he aims to demystify financial complexities, offering practical advice and tips to navigate the intricate world of finance and taxation.

Frequently Asked Questions

As an Indian resident taxpayer, you must complete and submit Form No. 10FA to the Assessing Officer. If you meet all the Tax Residency Certificate requirements, the officer will issue a certificate of residence (Form No. 10FB) to you.

Section 10FB states that non-resident Indians (NRIs) must obtain a Tax Residency Certificate (TRC) from the government of the country or territory where they are legal residents. The TRC should include specific information.

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. 

A Tax Residency Certificate (TRC) is a document issued by tax authorities to individuals or entities to confirm their tax residency status in a specific country. In India, the TRC is essential for claiming tax benefits under the Double Taxation Avoidance Agreement (DTAA) with other countries.

A tax residency certificate is a document issued by the Income Tax department of a taxpayer's resident country to confirm an individual's residency in that nation for a specific financial year.

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