Direct Tax Alert - CBDT further extends the timeline for electronic filing of Form 10F
03 April 2023
Section 90(4) of the Income-tax Act, 1961 (IT Act) provides that a non-resident is entitled to the benefit of a Double Taxation Avoidance Agreement (DTAA) only if such non-resident obtains a Tax Residency Certificate (TRC) from the country of his/its residence. Further, section 90(5) of the IT Act read with Rule 21AB of the Income-tax Rules, 1962 (IT Rules) provides for the furnishing of information in Form 10F in case such information is not provided in the TRC obtained. The Central Board of Direct Taxes (CBDT) issued a notification1 mandating Form 10F to be filed electronically. Subsequently, it issued another notification2 to relax the requirement of furnishing Form 10F electronically for non-resident taxpayers who do not have a Permanent Account Number (PAN) and are not required to have a PAN. This relaxation was till 31 March 2023 and such non-resident taxpayers were required to furnish manual Form 10F. Recently, the CBDT has issued another notification3 to further extend this. We, at BDO in India, have analysed and summarised the said notification and provided our comments on its impact hereunder:
- Considering the continued practical challenges faced by the aforementioned category of the taxpayer and to mitigate the genuine hardship faced by the such taxpayer, the abovementioned relaxation has been extended further till 30 September 2023.
- Thus, such taxpayers may make manual submissions of Form 10F till 30 September 2023 as done prior to the notification issued on 16 July 2022.
BDO in India comments
This is a welcome notification for the aforementioned taxpayers as it will enable them to file manual Form 10F during the extended relaxation. However, clarity is required on whether such taxpayers are required to obtain a PAN or whether the CBDT will come up with a mechanism for such taxpayers to electronically file Form 10F without having a PAN.
1Notification 3/2022 dated 16 July 2022
2Notification no. F. No. DGIT(S)-ADG(S)-3/e-Filing Notification/Forms/2023/9227, dated 12 December 2022
3Notification no. F. No. DGIT(S)-ADG(S)-3/e-Filing Notification/Forms/2023/13420, dated 28 March 2023