Now, NRIs without PAN can manually file Form 10F till 31 March for claiming TDS benefit

• CA Chandan Agarwal's Office

Taxpayers have faced problems in electronic filing of the form as the income tax portal didn’t allow a taxpayer who does not have a PAN to file Form 10F

The Central Board of Direct Taxes (CBDT) has given one-time relief to non-resident taxpayers or NRIs not having Permanent Account Number (PAN) by allowing them to file Form 10F manually till 31 March, 2023.

The income tax department’s move would ease their compliance burden, especially if they do not have a PAN, and allow them to claim lower Tax Deducted at Source (TDS) rate.

Back in July, the income tax department had made it compulsory for NRIs to file Form 10F electronically to claim benefit of lower TDS.

However, reports suggest that taxpayers faced problems in electronic filing of the form as the income tax portal didn’t allow a taxpayer who does not have a PAN to file Form 10F.

Form 10F is filed by non-resident taxpayers receiving payments from India who do not have PAN and required NRI’s Tax Residency Certificate details. TRC is required to confirm which country you are a tax resident of. This may be essential when you have incomes from more than one country.

Form 10F helps NRIs to avoid TDS on the payments accrued or received from India.

The CBDT in a statement said to mitigate genuine hardship to such taxpayers, it has been decided that such category of non-resident taxpayers who are not having PAN and not required to have PAN according to relevant provisions of the I-T Act would be exempted from mandatory electronic filing of Form 10F till 31 March next year.

The CBDT statement read: “It is reiterated that such category of taxpayers may make statutory compliance of filing Form 10F till March 31, 2023 in manual form as was being done prior to issuance of the (July) notification.”

“In respect of companies earning Royalties/FTS/Interest/Dividend income from India and taxes are required to be deducted, then technically they would also be obliged to obtain PAN. Accordingly, this relief may not be of much help unless it is further clarified. Post 31st March 2023, everyone is required to obtain PAN and do an online filing of Form 10F, as applicable,” said Nishit Parikh, Partner, Direct Tax, Sudit K Parekh & Co LLP.

Sans the notified transactions requiring quoting of PAN, non-residents can transact with Indian parties without the aversion of a higher 20% withholding tax rate if prescribed details such as name, e-mail id, address, contact number, TIN and a valid tax residency certificate (TRC) are furnished to resident Indian payer, Nangia Andersen LLP M&A Tax Partner Sandeep Jhunjhunwala has said.

“The partial relaxation notified by the CBDT would definitely eliminate the compliance pinpricks around the requirement of obtaining PAN by non-residents, only for the purpose of obtaining electronic 10F. The easing up, however, is only till March 31, 2023 and non-residents may want to keep their fingers crossed on further developments related to digital shift of compliances in India,” Jhunjhunwala added.

Source: https://www.livemint.com/news/india/now-nris-without-pan-can-manually-file-form-10f-till-31-march-for-claiming-tds-benefit-11671017467718.html