Relief for NRIs as the deadline to file Form 10F has been delayed to March 31, 2023

NRIs can manually file Form 10F by March 31, 2023.

NRIs

NRIs (Non-resident Individuals) can manually file their Form 10F by March 31, 2023, as the CBDT (The Central Board of Direct Taxes) has offered them a one-off relief. NRIs that receive payments from India and don't have a PAN card and Tax Residency Certificate are required to file form 10F. It helps avoid TDS on payments received or accrued in India. The Income Tax Act 1961 says every NRI earning from India has to do with TDS provisions. 

Also ReadHere are the tax residency rules for NRIs

The Central Board of Direct Taxes Notification

SW India's Saurrav Sood says the relaxation by the CBDT has been offered as NRIs not having PANs were unable to file Form 10F online on the portal. The portal requires PAN for individuals to register themselves. The NRIs cannot register without PAN and fill out the form online. CBDTs notification said the taxpayers who are not residents of our country and want to avail of DTAA provision benefits could file the form by March 31, 2023, if they don't have a PAN and have no obligation to apply for PANs. The Double Taxation Avoidance Agreement mandates the NRIs to fill out the form if they don't have Tax Residency Certificate details. Individuals have to pay higher TDS if they don't have a PAN. 

What the DTAA says 

The DTAA says that an NRI Taxpayer with a Tax Residency Certificate must furnish the following: Taxpayer Status, TIN of their foreign country, Address, and Name. The current rules of the Act allow NRI taxpayers to file the form, avoid TDS and take advantage of DTAA. The current rules allow eligible NRIs not to pay tax on Indian payments. The eligible taxpayer (NRI) can manually ask their accountant to file Form 10F by or before March 31. RSM India Founder Dr. Suresh Surana says the form is required by NRIs wanting to claim tax treaty benefits subject to Section 90(5). A July 16, 2022 notification suggests that NRIs not furnishing For 10F electronically will have to face a withdrawal of Treaty rates which would otherwise prove beneficial. It is because it has been made mandatory by the income tax authorities to furnish Form 10F with the Tax Residency Certificate to claim Treaty benefits. Interestingly, if an NRI does not electronically file Form 10F, the Indian resident deductor/remitter for nil deduction/shortfall will have to face penal and tax consequences as they might be treated as "assessee in default."

Also ReadHow to claim a TDS refund being an NRI.

A major implication of the July 2022 notification is that the NRI will require a PAN to file the form online. Lack of clarity and this technical hurdle led to a challenge for the NRIs to comply with Indian remittance documentation. Due to these challenges, the concerned authority has postponed the deadline to March 31, 2023, to facilitate such NRIs. 

NRIs (Non-resident Individuals) can manually file their Form 10F by March 31, 2023, as the CBDT (The Central Board of Direct Taxes) has offered them a one-off relief. NRIs that receive payments from India and don't have a PAN card and Tax Residency Certificate are required to file form 10F. It helps avoid TDS on payments received or accrued in India. The Income Tax Act 1961 says every NRI earning from India has to do with TDS provisions. 

Also ReadHere are the tax residency rules for NRIs

The Central Board of Direct Taxes Notification

SW India's Saurrav Sood says the relaxation by the CBDT has been offered as NRIs not having PANs were unable to file Form 10F online on the portal. The portal requires PAN for individuals to register themselves. The NRIs cannot register without PAN and fill out the form online. CBDTs notification said the taxpayers who are not residents of our country and want to avail of DTAA provision benefits could file the form by March 31, 2023, if they don't have a PAN and have no obligation to apply for PANs. The Double Taxation Avoidance Agreement mandates the NRIs to fill out the form if they don't have Tax Residency Certificate details. Individuals have to pay higher TDS if they don't have a PAN. 

What the DTAA says 

The DTAA says that an NRI Taxpayer with a Tax Residency Certificate must furnish the following: Taxpayer Status, TIN of their foreign country, Address, and Name. The current rules of the Act allow NRI taxpayers to file the form, avoid TDS and take advantage of DTAA. The current rules allow eligible NRIs not to pay tax on Indian payments. The eligible taxpayer (NRI) can manually ask their accountant to file Form 10F by or before March 31. RSM India Founder Dr. Suresh Surana says the form is required by NRIs wanting to claim tax treaty benefits subject to Section 90(5). A July 16, 2022 notification suggests that NRIs not furnishing For 10F electronically will have to face a withdrawal of Treaty rates which would otherwise prove beneficial. It is because it has been made mandatory by the income tax authorities to furnish Form 10F with the Tax Residency Certificate to claim Treaty benefits. Interestingly, if an NRI does not electronically file Form 10F, the Indian resident deductor/remitter for nil deduction/shortfall will have to face penal and tax consequences as they might be treated as "assessee in default."

Also ReadHow to claim a TDS refund being an NRI.

A major implication of the July 2022 notification is that the NRI will require a PAN to file the form online. Lack of clarity and this technical hurdle led to a challenge for the NRIs to comply with Indian remittance documentation. Due to these challenges, the concerned authority has postponed the deadline to March 31, 2023, to facilitate such NRIs. 

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