Govt. notifies amended Guidelines for Digital Social Media to provide for Redressal of Complaints to be adjudicated by the Committee set up by the Govt.
October 29, 2022Payment of Pre-deposit through Form GST DRC-03 not Valid for Service Tax / Excise Matters: CBIC
October 31, 2022
Govt. mandates mandatorily furnishing of Form 10F electronically to avail Double Tax Treaty benefits.
Recent Notification No. 03/2022 dated 16th July 2022 requires mandatory furnishing of Form 10F electronically. As per the provisions under Section 90(5) of the Income Tax Act,1961 (“the Act”) read with Rule 21AB of the Income Tax Rules, 1962 (“the Rules”), a self declaration Form 10F was required to be obtained from the Non Resident in respect of specified information not provided in the Tax Residency Certificate (“TRC”).
Section 90(4) of the Act provides that a non-resident shall not be entitled to the benefit of a Double Taxation Avoidance Agreement (‘DTAA’) unless such non-resident obtains a TRC from the Government of the country of which he is a resident.
While the TRC obtained from tax authorities may not contain all the specified information as required under Rule 21AB (1) of the Rules, Form 10F is furnished by the non-resident taxpayer for the balance information or as a matter of precaution. The form is signed physically by the non-resident taxpayer and furnished along with the TRC to the resident payer for the purpose of availing beneficial rate under DTAA and determining the withholding tax implications under section 195 of the Act.
Recent Notification No. 03/2022 dated 16th July 2022 issued by the Director General of Income-tax (Systems), mandates that certain forms, including Form 10F, shall be furnished electronically in the manner prescribed under Rule 131(1) of the Rules.
Post this Notification, it shall now be mandatory to furnish this Form 10F electronically.
However, it is to be noted that electronically furnishing of any form on the Web portal of the Income Tax Department requires login id and password to be created and login id is de facto the PAN number. This indirectly means that the Non Resident is now required to obtain PAN number if benefits under DTAA are to be availed by filing Form 10F electronically, although this may not be in consonance with the other provisions under the Act which specifically provide that obtaining PAN is not necessary for Non residents in certain situations.
Section 206AA of the Act, which prescribes a higher rate of tax for taxpayers who do not have PAN, provides an exception to a non-resident, not being a company, or to a foreign company, from obtaining PAN in the following situations:
- in case of interest on long-term bonds referred to in section 194LC of the Act; or
- in case documents as prescribed under Rule 37BC of the Rules, are furnished.
Rule 37BC of the Rules provides that the higher rate of tax @20% would not apply in case PAN is not obtained in respect of payments such as interest, royalty, fees for technical services, dividend and payments on transfer of any capital asset, provided the deductee furnishes specified information such as name, e-mail id, contact number, address in the tax resident country, TRC, Tax Identification Number or Unique Identification Number, etc.
However, now with the requirement of electronically furnishing of Form 10F, Non Resident will have to obtain PAN even in exceptions provided under Rule 37BC.
Further, electronically furnishing of documents on the Web portal of the Income Tax Department requires verification through digital signatures or Electronic Verification method and this may require the Non Resident to obtain digital signature as well.
