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TDS on Foreign Remittance - TRC and Form 10F - 2

Posted @ October 4, 2017, 12:22 am under (International Taxation Services)

In June 28, 2016 the CBDT has notified new Rule 37BC specifying the conditions to be fulfilled by non-resident deductees to avail relaxation from higher withholding tax rate under section 206AA of the Income-tax Act, 1961 in the absence of Permanent Account Number (PAN) in India.

Rule 37BC of the Rules provides that the provisions of section 206AA of the Act  shall not apply on following payments made to non-resident deductees who do not have PAN in India:

1)     Fee for Technical Services; and

2)     Interest;

3)     Royalty;

4)     Payments on transfer of any capital asset


Instead of quoting a PAN, non Resident recipient will now have to provide following details to the deductor:

·         Name, Email-ID, contact number

·         Address in the country of residence

·         Tax Residency Certificate (”TRC”)

·         Tax Identification Number (”TIN”) in the country of residence; if no TIN is being issued, any other unique identification number issued by the Government.


In case above details could not be provided, the deductor is under obligation to apply withholding tax rate of 20%. Non Resident Decductees already holding a PAN. Continue to provide their PAN on their invoices.



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