Form 10F & DTAA Benefits for Non-Residents: Law, Compliance, and Judicial Landscape

Statutory Framework – Sections, Rules, and Interpretation

Section 90(2) – Beneficial DTAA Application

“Where the Central Government has entered into an agreement with the Government of any country outside India… the provisions of this Act shall apply to the extent they are more beneficial to that assessee.”

Interpretation: A non-resident may opt for the more beneficial provisions of the DTAA instead of domestic tax rates under the Income-tax Act, 1961.

 Section 90(4) – Tax Residency Certificate (TRC) is Mandatory

“An assessee, not being a resident, shall not be entitled to claim any relief under a DTAA unless a certificate, containing such particulars as may be prescribed, of his being a resident in any country… is obtained.”

Interpretation: DTAA relief is not automatic. The non-resident must furnish a TRC issued by the foreign tax authority.

 Section 90(5) – Other Prescribed Documents Required

“The assessee referred to in sub-section (4) shall also provide such other documents and information, as may be prescribed.”

Interpretation: TRC is not enough. The Income-tax Rules prescribe additional disclosures, the key one being Form 10F.

 Rule 21AB – Prescribed Disclosures

Rule 21AB lays down:

1. Form 10F must be submitted if the TRC does not contain all of the following:

   • Status of the assessee (individual/company/firm, etc.)

   • Nationality or country of incorporation

   • Tax Identification Number (TIN) or equivalent

   • Period of tax residency

   • Permanent registered address

2. Form 10F must be signed by the assessee (now electronically as per notification).

Interpretation: Since most foreign TRCs do not contain all five fields, Form 10F is functionally compulsory.

 Judicial Position on Form 10F and DTAA

✅ 1. Apollo Tyres Ltd. v. DCIT (2007) 292 ITR 45 (SC)

Held that “DTAA overrides domestic law where more beneficial; however, administrative compliance like TRC or prescribed documents are necessary.”

✅ 2. DIT v. Samsung Electronics Co. Ltd. (2011) 345 ITR 494 (Kar)

Withholding tax cannot be applied at DTAA rate unless complete documentation (TRC + 10F) is provided.

✅ 3. GFA Anlagenbau GmbH v. ITO (ITAT Delhi, 2022)

Where 10F was not submitted and TRC lacked prescribed fields, DTAA benefit was denied despite payment being covered under treaty.

Inference: Courts support the strict requirement of furnishing both TRC and 10F, failing which domestic TDS rates apply.

CBDT Circulars and Notifications

 Notification No. 03/2022, dated 16.07.2022

• Mandatory e-filing of Form 10F via income tax portal

• Applies even if the non-resident does not have a PAN or is not required to file an ITR in India

 Circular No. 01/2023, dated 12.01.2023

• Gave temporary manual filing relief for non-residents not having PAN

• Relief valid up to 31 March 2023

 Notification dated 28.03.2023

• Extended manual filing relief till 30 September 2023

Post 01.10.2023: Only e-filing through the income tax portal is valid.

Filing Procedure of Form 10F (Post PAN Exemption)

✅ 1. Who Must File

Every non-resident assessee seeking DTAA benefit must file Form 10F, electronically, whether or not they have a PAN or are filing a return in India.

✅ 2. PAN Not Required Anymore

The Income Tax Department has allowed foreign taxpayers to register using their Foreign TIN or passport.

 Even if the non-resident does not have PAN, they can now register and e-file Form 10F using their TIN/passport number.

 3. Step-by-Step Procedure to E-File Form 10F

A. For Non-Residents Without PAN:

1. Visit https://www.incometax.gov.in

2. Click on Register > Non-resident

3. Enter:

   • Name, Country of Residence

   • TIN or Passport Number

   • Email and Mobile (for OTP)

4. Login after verification

5. Navigate to:
   e-File → Income Tax Forms → File Income Tax Forms → Form 10F

6. Fill the form:

   • Status, Nationality

   • TIN and Address

   • TRC validity period

7. E-verify via email OTP

8. Download acknowledgment

B. For Non-Residents With PAN:

• Login with PAN

• File as above

Implications of Non-Filing

Issue	Consequence
TRC not furnished	No DTAA benefit, full rate TDS
Form 10F not filed	DTAA benefit denied due to non-compliance
Filed manually post 30.09.2023	Invalid – must file electronically
No PAN or registration	Register using TIN or passport

Withholding tax under Section 195 must be at higher domestic rates if Form 10F is not e-filed.

Implications for Indian Payers and Tax Professionals

1. Ensure TRC + e-acknowledged Form 10F before accepting lower DTAA rate

2. Manual 10F post 30.09.2023 should be rejected

3. Document and archive 10F + TRC along with Form 15CB/15CA

4. Train clients and overseas vendors to complete e-registration

5. Apply conservatism in absence of compliance → deduct tax at full rate

Conclusion

The Form 10F regime has moved from discretionary to statutory. Courts have upheld its significance, and with the e-filing mandate in place, there is no excuse for procedural non-compliance.

For any non-resident seeking DTAA relief in India:

• TRC + electronically filed Form 10F = minimum eligibility condition

• No Form 10F = No DTAA benefit

Advisors, businesses, and multinational clients must be sensitized to this rule and integrate it into their cross-border compliance checklists.