“Synopsis”
If you’re an NRI earning income in India—whether through rent, interest, or capital gains—you’ve probably noticed a chunk of it disappearing as TDS (Tax Deducted at Source). The good news? You can legally reduce this deduction using two key documents: Form 10F and a Tax Residency Certificate (TRC). This guide walks you through how to use them effectively in 2025 to claim DTAA (Double Taxation Avoidance Agreement) benefits and lower your tax burden.
1. Why NRIs Face Higher TDS in India
Under Section 195 of the Income Tax Act, 1961, any income paid to a non-resident is subject to TDS—often at rates as high as 30% plus surcharge and cess. This applies to:
- Rental income
- Interest on NRO accounts
- Capital gains from property
- Dividends from Indian companies
But if your country has a DTAA with India, you can claim a lower rate or exemption—provided you submit the right documents.
2. What Is a Tax Residency Certificate (TRC)?
A TRC is issued by your country of residence and confirms that you’re a tax resident there. It’s mandatory under Rule 21AB of the Income Tax Rules to claim DTAA benefits.
Your TRC should include:
- Your full name
- Tax Identification Number (TIN)
- Country of residence
- Period of residency
- Status (individual, company, etc.)
If any of these details are missing, you’ll need to file Form 10F to fill the gaps.
3. What Is Form 10F and Why Is It Needed?
Form 10F is a self-declaration form required under Section 90(5) of the Income Tax Act. It supplements your TRC and provides additional details like:
- Your nationality
- Address outside India
- Duration of stay abroad
- Nature of income earned in India
- DTAA article under which relief is claimed
Since July 2022, Form 10F must be filed electronically via the Income Tax portal—even if you don’t have a PAN. The portal now allows non-residents to register without a PAN and file Form 10F online.
4. Step-by-Step: How to Claim Lower TDS Using TRC & Form 10F
Step 1: Get Your TRC Apply through your home country’s tax authority. Ensure it includes all required details.
Step 2: File Form 10F Online Log in to the , register as a non-resident (if you don’t have a PAN), and submit Form 10F electronically.
Step 3: Submit to Income Payer Give both TRC and Form 10F to the Indian entity paying you—whether it’s a bank, tenant, or buyer.
Step 4: Ensure Correct TDS Deduction Once the payer has your documents, they can deduct TDS at the reduced DTAA rate.
Step 5: File Your ITR To claim refunds or finalize your tax position, file your Income Tax Return (ITR) in India using ITR-2 or ITR-3.
5. Legal Backing for This Process
- Section 90 & 91 of the Income Tax Act, 1961 – DTAA relief
- Section 195 – TDS on payments to non-residents
- Section 206AA – Higher TDS if PAN not furnished
- Rule 21AB – TRC requirements
- CBDT Notification (2022) – Mandatory e-filing of Form 10F
These provisions ensure that NRIs can legally reduce TDS and avoid double taxation.
6. Common Mistakes NRIs Should Avoid
- Submitting outdated or incomplete TRC
- Not filing Form 10F electronically
- Assuming DTAA benefits apply automatically
- Not filing ITR to claim refunds
- Using resident accounts instead of NRO/NRE
Avoiding these errors ensures smoother compliance and faster refunds.
Conclusion
In 2025, claiming DTAA relief isn’t just about paperwork—it’s about knowing your rights and using the law to your advantage. With a valid TRC and properly filed Form 10F, you can significantly reduce your TDS burden and keep more of your Indian income. Don’t let confusion or delay cost you—get your documents in order and file smart.
