Easier procedure soon for non-residents to claim treaty benefits

financialexpress.com:

The Central Board of Direct Taxes (CBDT) is likely to allow non-resident taxpayers to take tax benefits under the double taxation avoidance agreements (DTAAs) without quoting the permanent account number (PAN), as they file the relevant form electronically, a senior official told FE.

This will ease the compliance burden to avail the treaty benefits for large sections of non-resident taxpayers, especially those who undertake one-off transactions, he said. A notification for the same is likely to be issued in a few days.

The Income Tax Act of 1961 allows non-resident taxpayers to claim tax benefits under tax treaties. But for doing so, they must submit a Tax Residency Certificate (TRC) and Form 10F to avail DTAA benefits.

Currently, such non-resident taxpayers, who receive payments from India and do not have PAN, require TRC details–which is needed to confirm which country the taxpayer is a resident of. Form 10F helps the non-resident taxpayers to avoid TDS on the payments accrued or received from India.

“The non-resident taxpayers who have expressed their hardships in filing Form 10F, will be able to do so electronically, without the requirement of PAN…till now, they were asked to file the same manually, but that provision will be done away with,” the official said.

The CBDT is March had extended the extended the Form 10F e-filing exemption for Non-resident taxpayers without PAN till September 30. The extension was given for such taxpayers to file the form manually.

Rahul Garg, partner, at Price Waterhouse & Co LLP said: “Non-resident taxpayers doing one-off transaction in India, and are required to take PAN registration faces an additional burden. If that’s done away with, it will aid doing business in India specially