CBDT exempts NR taxpayers from mandatory Form 10F e-filing for now

The Central Board of Direct Taxes (CBDT) has given partial relief to non-resident taxpayers by exempting them from mandatory electronic filing of Form 10F until March 2023. Filing this form is required to claim the benefits of tax treaty.

The Form 10F is signed physically by non-resident taxpayers and furnished along with the tax residency certificate to resident payers for the purpose of determining withholding tax implications.

The move has been made after considering the challenges faced by non-resident taxpayers, especially those who do not have a PAN.

“…with a view to mitigate genuine hardship to such taxpayers, it has been decided by the competent authority that such category of non-resident taxpayers who are not having a PAN and not required to have a PAN as per relevant provisions of the Income-tax Act, 1961, read are exempted from mandatory electronic filing of form until March 31, 2023,” CBDT said in a notification on Tuesday.

The CBDT in July mandated electronic filing of the form but this created a hurdle for non-resident taxpayers as in certain cases, a non-resident payee is not required to obtain a PAN under the Act.

“The partial relaxation notified by the CBDT would definitely eliminate the compliance pinpricks around the requirement of obtaining a PAN by non-residents, only for the purpose of obtaining electronic 10F. The easing up, however, is only until March 31, 2023, and non-residents may want to keep their fingers crossed on further developments related to the digital shift of compliances in India,” said Sandeep Jhunjhunwala, M&A Tax Partner at Nangia Andersen LLP.