20 June, 2025 at 4:25 pm
Everyone must understand that you need to apply for a Tax Residency Certificate, as it will not automatically be issued to you. You can apply for a TRC by using your Permanent Account Number (PAN), Income tax returns filed in India for the relevant financial year, passport copy, Aadhaar card or any other ID proof, utility bills or rental agreement, and any other details or documents as per the requirement.
Your tax residency certificate will act as proof of residence for your resident country within a given financial year. It will help you to avoid double taxation and enjoy the benefits that come with the DTAA treaties. In India, the TRC certificates are valid till the end of the fiscal year from their date of issue. Since it is only valid for one year, you will have to renew it every year to continue enjoying the DTAA tax benefits without any restrictions.
People often get confused between the TRC and the Form 10F. Form 10F is a self-declaration that is submitted by NRIs of foreign entities to claim the DTAA benefits, while TRC is an official document that is provided by the tax authority of the taxpayer's residence country.
A TRC is an important document for you if you are a resident of one country but are earning income from another country.
Having a TRC is vital to claim benefits under the DTAA agreement (Double Taxation Avoidance Agreement) between two countries. It will help you to prevent double taxation and will provide access to reduced or even exempted tax rates on various types of income.
I personally had issues with withdrawing my dividend in the US, and that is when I decided to get my TRC issued. Once I did that, the tax rates reduced significantly, and I could easily acquire the DTAA benefit. I would recommend every NRI to get the TRC as it is very helpful.
The TRC is important for NRIs and foreign businesses who are earning income in India or abroad to prove their residency status for tax purposes. Without a TRC, they may be liable to pay full tax in both countries.
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