A Tax Residency Certificate (TRC) is a mandatory document for any foreign company or non-resident individual claiming reduced withholding tax rates under India's Double Tax Avoidance Agreement (DTAA) network. Without a valid TRC, Indian payers must deduct TDS at the higher domestic rate (typically 20% under Section 115A of the Direct Tax Code 2025, plus surcharge and cess) rather than the lower treaty rate. The TRC is issued by the tax authority of the foreign entity's home country and must be submitted alongside Form 10F and a No PE Declaration to the Indian payer.

• Mandatory under Section 90 of the Direct Tax Code 2025 (erstwhile Section 90 of the Income Tax Act 1961)
• DTAA treaty rates (e.g., 10% for UAE, Russia, China, Sweden, Switzerland) are only available with a valid TRC
• Without TRC, TDS is deducted at 20% + surcharge + cess under Section 115A

What is a Tax Residency Certificate?

A Tax Residency Certificate (TRC) is an official document issued by the tax authority of a country confirming that a person or company is a tax resident of that country. In the context of India's DTAA network, it proves that the foreign entity is eligible to claim the benefits of the Double Tax Avoidance Agreement signed between India and their home country. The certificate is valid for the financial year it is issued for and typically needs to be renewed annually.

India has signed DTAA treaties with over 90 countries, including the UAE, USA, UK, Germany, Singapore, Sweden, Switzerland, Russia, China, South Korea, Denmark, and Italy. Each treaty prescribes a reduced rate of tax on income such as dividends, royalties, and fees for technical services (FTS). The TRC is the foundational proof that unlocks these lower rates.

Why is TRC Mandatory for DTAA Benefits?

As of April 2026, the Direct Tax Code 2025 (which replaced the Income Tax Act 1961) explicitly requires a foreign entity to furnish a TRC as a precondition to claiming any DTAA benefit in India. Without it, the Indian company making the payment cannot apply the treaty rate and must deduct TDS at the default domestic rate of 20% under Section 115A, plus applicable surcharge and cess.

Beyond the TRC, a complete DTAA benefit claim in India requires the following documents:

• Tax Residency Certificate (TRC) — issued by the foreign tax authority
• Form 10F — self-declaration filed electronically on the Indian Income Tax portal
• No PE Declaration — declaration that the foreign entity has no Permanent Establishment in India (see our No PE Declaration guide)
• PAN Card — required to file an Income Tax Return in India, if the foreign entity intends to claim a treaty refund
• Income Tax Login — the foreign entity must have an active login on the Indian Income Tax e-filing portal
• DSC of Authorised Signatory — a Digital Signature Certificate (DSC) of the authorised foreign signatory is required to file ITR; a regular director's DSC will not work; an organisational DSC is mandatory

TRC vs. No TRC: Tax Rate Comparison

The financial impact of not having a valid TRC is significant. The table below compares the TDS rates on royalties and FTS under DTAA versus the domestic default rate under Section 115A.

Country	DTAA Rate (with TRC + Form 10F)	Default Rate (no TRC, Section 115A)
UAE	10%	20% + surcharge + cess
Russia	10%	20% + surcharge + cess
China	10%	20% + surcharge + cess
Sweden	10%	20% + surcharge + cess
Switzerland	10%	20% + surcharge + cess
South Korea	10%	20% + surcharge + cess
Italy	20%	20% + surcharge + cess
Denmark	20%	20% + surcharge + cess

For countries like Italy and Denmark, the DTAA rate matches the Section 115A rate on royalties/FTS, so the primary benefit of having a TRC is procedural compliance and avoiding disputes, rather than a lower tax rate.

How to Get a Tax Residency Certificate?

The process to obtain a TRC depends entirely on the home country of the foreign entity. The foreign company or individual must apply to their own country's tax authority. Below is the general process for common jurisdictions:

For Residents of the UAE

UAE-resident companies or individuals can apply for a TRC through the Federal Tax Authority (FTA) portal. As of July 2026, the FTA issues TRCs digitally for corporate entities and individuals with UAE residency. Refer to our detailed guide on UAE-India DTAA royalty payments for step-by-step details.

For Residents of Other Countries

Most countries issue TRCs through their national tax authority (e.g., HMRC for the UK, IRS for the USA, IRAS for Singapore). The foreign entity must prove they are registered and paying taxes in that country. Processing times vary from 2 weeks to 2 months depending on the jurisdiction.

Key Contents of a Valid TRC

For a TRC to be accepted by Indian authorities, it must contain the following information as mandated under the Direct Tax Code 2025:

• Name of the taxpayer (individual or company)
• Status (individual, company, firm, etc.)
• Nationality (for individuals) or country of incorporation (for companies)
• Tax Identification Number in the home country
• Residential status for the tax year
• Period for which the certificate is valid
• Address during the period of validity

How Does Form 10F Work with TRC?

Form 10F is a self-declaration form filed by the non-resident on the Indian Income Tax e-filing portal. It supplements the TRC by providing any information that the TRC does not contain from the mandatory list above. Both documents must be submitted together to the Indian payer before the payment is made.

As of 2026, Form 10F must be filed electronically on the Income Tax portal by the foreign entity themselves. This requires the foreign company to have a PAN card and an active Income Tax login in India. Explore our country-specific guides for more:

• Form 10F for China-India DTAA
• Form 10F for Russia-India DTAA
• Form 10F for South Korea-India DTAA
• Form 10F for Sweden-India DTAA
• Form 10F for Switzerland-India DTAA

Royalty, FTS, and the Section 115A Rule

For payments classified as Royalty or Fees for Technical Services (FTS), a foreign company has two options under Indian tax law as of 2026:

1. Pay tax at 20% under Section 115A of the Direct Tax Code 2025 (plus surcharge and cess), without claiming DTAA benefit. In this case, there is no obligation to file an Income Tax Return (ITR) in India.
2. Claim the DTAA rate (e.g., 10% for UAE, Russia, China, Sweden, Switzerland), in which case the foreign company must file an ITR in India. This requires a PAN, Income Tax login, TRC, Form 10F, No PE Declaration, and a DSC of the authorised foreign signatory.

The decision to opt for Section 115A vs. DTAA depends on the treaty rate. For countries where the DTAA rate is 10%, claiming the treaty benefit and filing an ITR is clearly advantageous. For countries where the treaty rate equals or exceeds 20%, Section 115A may be simpler.

DSC Requirements for Foreign Signatory

One of the most critical and often overlooked requirements is obtaining a valid Digital Signature Certificate (DSC) for the authorised foreign signatory. A regular DSC of a director or partner will not suffice. An organisational DSC is mandatory for filing ITR in India on behalf of a foreign company.

To obtain a DSC for a foreign individual/director, the following is required:

• Email OTP and phone OTP verification from the foreign individual
• Video verification of the foreign individual
• Address proof (driving licence or equivalent)
• Photograph
• Copy of passport

This process is handled by licensed Certifying Authorities (CAs) in India and typically takes 5 to 10 business days after all documents are submitted.

Complete DTAA Compliance Checklist (2026)

To summarise, here is everything a foreign company needs to successfully claim DTAA benefits on payments received from India as of 2026:

Document / Action	Purpose	Who Obtains It
Tax Residency Certificate (TRC)	Proves tax residency in treaty country	Foreign tax authority of home country
Form 10F	Supplements TRC with required details	Filed by foreign entity on Indian IT portal
No PE Declaration	Confirms no Permanent Establishment in India	Foreign entity (signed declaration)
PAN Card (India)	Required for Indian IT portal login and ITR filing	Applied for in India by foreign entity
Income Tax Login (India)	Required to file Form 10F and ITR electronically	Created on Indian e-filing portal using PAN
Organisational DSC of foreign signatory	Required for e-signing ITR and Form 10F	Obtained via licensed CA in India
Income Tax Return (ITR)	Mandatory if claiming DTAA benefit (not required under Section 115A)	Filed by foreign entity (with Taxocity's support)

How Taxocity Helps with DTAA Compliance

Taxocity has been assisting foreign companies and their Indian counterparts with DTAA compliance for over three decades. With a 4.8/5 rating from 5,000+ clients, our team of real human experts handles the entire DTAA compliance workflow end to end, including:

• Advising on TRC requirements specific to the foreign company's home country
• Applying for PAN on behalf of the foreign entity in India
• Setting up the Income Tax portal login for the foreign company
• Filing Form 10F and preparing the No PE Declaration
• Arranging the organisational DSC for the foreign authorised signatory
• Filing the ITR in India for the foreign company to claim the DTAA benefit and any refund of excess TDS

Our 100% compliance guarantee means you can be confident every document is filed accurately and on time. Talk to a DTAA Compliance Expert today.

Key Takeaways

1. A TRC from the foreign entity's home country is mandatory to claim DTAA benefits in India.
2. TRC must be accompanied by Form 10F, a No PE Declaration, PAN, IT login, and an organisational DSC.
3. Without a TRC, TDS is deducted at 20% + surcharge + cess under Section 115A of the Direct Tax Code 2025.
4. For royalty/FTS, paying at Section 115A (20%) avoids the need to file an ITR in India; claiming the DTAA rate requires ITR filing.
5. A foreign signatory's DSC must be an organisational DSC — a regular director's DSC is not accepted.
6. DTAA rates for UAE, Russia, China, Sweden, Switzerland, and South Korea are 10% on royalties/FTS; Italy and Denmark are 20%.

Frequently Asked Questions

Is TRC mandatory every year?

Yes. A Tax Residency Certificate is typically valid for one financial year and must be obtained fresh for each assessment year in which DTAA benefits are claimed. Indian tax authorities can reject a claim if the TRC covers a different period than the payment date.

Can an Indian company get a TRC?

Yes. Indian residents can obtain a TRC from the Indian Income Tax Department (using Form 10FA) to claim DTAA benefits in a foreign country. This is a separate process from the one described in this article, which covers foreign entities claiming DTAA benefits in India.

What if a TRC is not available at the time of payment?

If the TRC is not available at the time of payment, the Indian payer must deduct TDS at the higher rate under Section 115A (20% + surcharge + cess). The foreign entity can later submit the TRC and claim a refund of excess TDS by filing an ITR in India, subject to the applicable DTAA rate.

What is the difference between TRC and Form 10F?

A TRC is issued by the foreign government and certifies tax residency in a treaty country. Form 10F is a self-declaration form filed by the non-resident on the Indian Income Tax portal to provide any information required under the DTAA that is not included in the TRC. Both are required together to claim DTAA benefits in India.

---

Disclaimer: This article is for informational purposes only and does not constitute tax advice. Tax laws, treaty provisions, and compliance requirements are subject to change. Please consult a qualified tax advisor before making any decisions based on the information provided here.