What is a Tax Residency Certificate (TRC) and why is it needed?

Question

tdsguru.in (CA firm) · Accepted Answer

A TRC is a certificate issued by the payee's home country confirming tax residence; it is mandatory to claim DTAA benefits on Indian TDS. A Tax Residency Certificate is issued by the tax authority of the non-resident's country of residence and confirms that the person is a tax resident there. It is the basic document required to claim DTAA relief on a payment from India. Along with the TRC, the non-resident furnishes Form 10F (with details not contained in the TRC) and usually a no-permanent-establishment declaration. Without a valid TRC, the deductor must apply the Act's rate rather than the often-lower treaty rate.