A Tax Residency Certificate (TRC) is an official document issued by the Income Tax Department of India that certifies a person’s residency status for tax purposes during a specific financial year. It is primarily used to claim tax relief under the Double Taxation Avoidance Agreement (DTAA) that India has signed with various countries.
This certificate helps individuals or entities avoid being taxed twice — once in India (their country of residence) and again in the foreign country where the income is earned.
An individual’s physical stay is considered for deciding the status of residence in India. An individual who is qualified as a ‘Resident and Ordinarily Resident’ (ROR) is expected to pay taxes for the taxes that he/she has earned abroad. Both his/her foreign as well as Indian income is subject to tax. This foreign income will be taxed in the country where it was earned too. The individual will end up paying tax for the same income twice- in the resident country as well as source country.
In order to avoid such a situation, the nations entered into a Double Taxation Avoidance Agreement (DTAA) to provide relief to such taxpayers. These taxpayers can claim the benefits while paying income tax in such nations. This benefit can only be claimed after he/she proves his residency in the country, and to prove it, a TRC helps. In short, it is a document that is issued by the IT department of the residency country, confirming that the individual is a resident of that particular country for that particular period.
India has made it compulsory for NRIs who have a revenue from India and want to claim the treaty benefits to have a valid TRC.
As per the 2025–26 Union Budget, the government aims to streamline cross-border taxation compliance for NRIs and foreign investors. Integration of PAN-Aadhaar databases and improved faceless assessment procedures now make it easier to obtain a TRC for DTAA claims.
There are various benefits that you can enjoy by getting a Tax Residency Certificate. Some of the benefits being:
Double Taxation Relief: A person classified as Resident and Ordinarily Resident (ROR) under Indian tax law may be liable to pay tax twice on foreign income — once in the source country and again in India. For instance, a resident earning in the UK may have to pay tax in the UK as well as in India. To prevent this and provide relief, the Indian government enters into a DDTA with other countries' governments. In order to enjoy this benefit with DTAA, the taxpayer has to get a TRC that proves the taxpayer’s residency in India.
Remittance Transparency: In case a resident of India exports goods and services, for the amount remitted for exports to the foreign entities with whom the transaction is made, will ask for the TRC before making a remittance. Thus, Tax Resident Certificate brings transparency in fund remittance of transactions between the two country entities.
One Year Validity: Tax Residency Certificate after it is issued remains valid till the end of the year. Therefore, there is no need for multiple applications or lengthy recurring processes. TRC issuance and requirements are governed by provisions under Section 90 and 90A of the Income Tax Act, 1961, and CBDT Notification No. 57/2013.
Salary earned abroad
Income that is earned from services that are provided abroad
Income from assets abroad
Capital gain on property transfer abroad
Fixed deposit interest
Saving bank account interest
Revenue from agricultural produce sold abroad
Shares and fund dividends
Tax Residency Certificate for Indian Resident Taxpayer
A resident of India who earns income from countries with which India has a DTAA agreement can get a TRC from the Indian IT department. Such residents of India can submit TRC to claim the benefits of tax treaty. In order to get a TRC, the person would have to make a Form no.10FA application to the assessing officer.
The assessing officer on getting such an application after being satisfied with the application, the officer would issue a TRC of such a person in Form no. 10FB.
2. Tax Residency Certificate for Taxpayers who are Non-Residents
Any individual who is a non-resident of India, as per Indian IT law, should obtain a Tax Residency Certificate from the country’s government or the territory of which he/she claims to be a resident. This TRC has to contain the following details, namely:-
Taxpayer’s name
Taxpayer status (e.g., individual, firm, company)
Nationality or specified territory/country of incorporation (in case of a LLP, company or Firm) or registration
Taxpayer's tax ID number
Residential status
Certificate validity period
Taxpayer address for the time period in which the certificate is applicable
The Tax Residency Certificate format varies from country to country. Therefore, if the TRC is issued by the government of a foreign country that does not have a few details mentioned above, then the non-resident individual will be required to provide the details mentioned in Form 10F.
It is recommended that the non-resident individual keeps and maintains such documents as it may be necessary to provide evidence for the details provided in Form 10F. Additionally, the IT authorities may need to verify these documents.
Form 10F is a self-declaration form required when a non-resident individual or entity wants to claim tax treaty benefits under the Double Taxation Avoidance Agreement (DTAA), especially when the Tax Residency Certificate (TRC) issued by the foreign government does not contain all the required details.
This form acts as additional documentation to establish proof of tax residency and helps avoid TDS (Tax Deducted at Source) at higher rates.
Key Reasons for Filing Form 10F:
Enables claiming reduced TDS rates under DTAA
Mandatory for NRIs receiving income from India but not having a PAN
Helps substantiate tax residency and eligibility for treaty relief
Form 10F filing exemption (Budget Update)
The CBDT had exempted non-resident taxpayers without PAN from mandatory electronic filing of Form 10F until 31st March 2023. Any new circulars under the 2025–26 Union Budget must be consulted for updated timelines.
The details that have to be provided in Form 10F are:
Status of the assessee (individual, company, firm, etc.)
Nationality (or country of incorporation)
Tax Identification Number(TIN) of the country of residence
Period of residential status applicability
- Address of the assessee during the applicable period
FAQs
What is a Tax Residency Certificate?
If you earn income from a foreign country, you’ll be taxed by the resident as well as the source country. However, under DTAA, a tax residency certificate helps you save a fortune on double taxation.
What is the full form of TRC?
TRC stands for Tax Residency Certificate.
Is TRC mandatory?
Yes, India has made the certificate of residency mandatory if you want to avail tax benefits under DTAA.
How can I get the Tax Residency Certificate in India?
You can get the TRC in India by submitting Form no. 10FA to the income tax authorities in India.
Can Form 10FA be filed online?
No, you cannot apply for the tax residency certificate online (Form 10FA). However, you can locate the Assessing Officer online. Enter your PAN and registered mobile number on the e-filing website. Download Form 10FA, fill it up and physically submit it to the officer.
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