Tax Residency Certificate- Significance of Form 10FB - How to Get it

 Form 10FA is an application to request a Tax Residency Certificate from the Income Tax Department. After scrutiny and approval, the TRC is issued in Form 10FB by the tax department.

Purpose of Tax Residency Certificate (Form 10FB)

To prevent double taxation, Sections 90, 90A, and 91 provide taxpayers with options to claim benefits and pay tax on their foreign income only once. Both tax credit/refund and relief are applicable, depending on the presence (or absence) of DTAA with the country/organisation, or the nature of the business of the applicant with that entity. DTAA stands for the Double Taxation Avoidance Agreement under Section 90 of the Indian IT Act.

A tax residency certificate is mandatory for obtaining relief from tax being deducted by foreign agencies (to avoid duplicate tax deductions) in which you have certain interests. The certificate (Form 10FB) is provided after your application gets approved by the department. It may take two to four weeks, depending on your activities.

Filling out and submitting the application form (10FA) typically takes 15 to 30 minutes, provided you have all the necessary details and supporting documents ready. The process is straightforward and requires basic information such as PAN, address, and the financial year for which the certificate is needed.

Factors Affecting Time and Process 

 

Procedure: 

The time depends on having the necessary documents ready, such as a PAN, proof of residence, and details of the income source, all of which must be readily available. As proof of residence, you can provide the recent (last month) electricity bill. Sometimes, the bills bear the builder's name or the owner's name. In such circumstances, you need to support the bill with a sale deed or rental agreement (if a tenant).  

Document Upload: 

You will need to upload supporting documents in PDF or ZIP format (max size 5MB each). 

Verification: 

After filling the form, you must verify it using an OTP sent to your registered mobile and/or email, or via digital signature (DSC). 

Processing Time: 

While the filing time is short, obtaining the Certificate of Residence (Form 10FB) after submitting Form 10FA can take 2 to 4 weeks. 

The Tax Residency is valid for the year for which you apply. So, you should seek a fresh certificate each year if you are in need of it.

Steps to Complete Form 10FA Online 

1. Login: Log in to the Income Tax e-Filing portal.

 

If you don't have an account on the Income Tax Portal, you need to create one or use other offline methods as mentioned at the end of this article. To create an account, you should provide your PAN number, mobile number, and other required details. You should also link your Aadhar Card to use the services.

2. Navigate: Go to 'e-File', 'Income Tax Forms', and click 'File Income Tax Forms'. 

3. Form Selection: Search for and select Form 10FA. 

4. Fill Data: Enter personal details, PAN, address, and financial year details. 

5. Upload Documents: Upload supporting documents. 

6. Verify & Submit: Verify using OTP (mobile/email) and submit.

You will be notified when the certificate is ready for download.

Obtaining TRC through Offline Mode

If you find it difficult to procure the certificate through an online application, you can take the services of any Tax Consultant or Chartered Accountant. They may charge some nominal fees for this work. You will have to provide the details and the documents necessary for this purpose. ClearTax is a consultancy firm that offers these services, as per my knowledge. They can do all your income tax jobs.

Do You Know? Income Tax Department Indulges in NUDGE Awareness Campaigns

In common usage, a nudge means the act of pushing your friend/neighbor with the elbow. It is a way of drawing his attention to something that you want to. This act of pushing is adopted by our (Indian) Income Tax Department to alert taxpayers to rectify their mistakes before issuing any notices.

The NUDGE in Indian Income Tax stands for "Non-Intrusive Usage of Data to Guide and Enable". It is a campaign by the Central Board of Direct Taxes (CBDT) that uses advanced data analytics to identify potential discrepancies in a taxpayer's filed return and encourages them to voluntarily correct the errors.

According to TOI's article (linked at the bottom) dated December 25, some taxpayers received these SMS's/emails. 

Key Aspects of the NUDGE Campaign:

Advisory Nature: 

The communication (via SMS and email) is advisory and not a formal legal notice or the start of an intrusive investigation. It reflects a "trust-first" approach by the tax department to promote voluntary compliance.

Data-Driven: 

The campaign utilises data analytics and information received from various sources, including international information exchange agreements (such as AEOI, CRS, and FATCA), to identify high-risk cases.

Specific Issues: 

The campaign targets particular issues, such as:

• Ineligible deductions or exemptions claimed (e.g., bogus donations to unrecognised political parties).
• Incorrect or invalid Permanent Account Numbers (PANs) of donees or other entities.
• Non-disclosure or underreporting of foreign assets and foreign source income in the ITR's Schedule FA and Schedule FSI.
• Other issues of importance.

What to Do When You Receive a Nudge Message 

Taxpayers who receive a NUDGE message are advised to review their Income Tax Returns (ITRs) for discrepancies and, if necessary, file a revised return within the specified deadline (e.g., by December 31 for the relevant assessment year) to avoid potential penalties or a detailed investigation later.

Taxpayers are advised to carefully verify all deductions and exemptions claimed on their returns against supporting documents to ensure accuracy and compliance.

If discrepancies are identified, taxpayers should correct the figures and file a revised return on or before December 31 to avoid penalties, additional tax liabilities, or further scrutiny by the department.

Individuals whose claims are genuine and in accordance with the law do not need to take any further action. 

However, they may retain documentation in case verification is requested by the department.

Key deductions under scrutiny include House Rent Allowance, donations to political parties, foreign source receipts/payments, and exemptions under the Double Taxation Avoidance Agreement.

We should note that the NUDGE initiative is part of the department’s trust-first approach, which aims to provide taxpayers with an opportunity to voluntarily correct errors in their returns without facing immediate enforcement action. So, we should be thankful and appreciate their cooperation.

For some more news, please read this article from The Times of India dated December 25, 2025.

What is AIS in Income Tax Returns and How it Differs from Form 26AS

A sample of the front page

 An AIS, or Annual Information Statement, is a detailed report introduced by India's Income Tax Department. 

It enables a consolidated view of a taxpayer's financial transactions executed during a year, aiming to encourage voluntary compliance and assist in the pre-filling and submission of Income Tax Returns (ITR). 

This auto-generated statement is available on the Income Tax Portal. This information is compiled automatically by the Tax Department from data collected from various third-party entities that are legally mandated to report financial transactions associated with a taxpayer's Permanent Account Number. 

The AIS contains two Parts- A (providing general information of the taxpayer) and B (financial transactions done by or related to him).

The length of the statement depends on the volume of transactions mentioned under 57 categories of income and expenses in Part B.

Key Details and Features

1. Comprehensive Data Compilation

The AIS includes a broad range of information reported by various entities (like banks, employers, mutual funds, stock exchanges, etc.) using your Permanent Account Number (PAN).

Even the LIC and PF organisations provide their statements regarding your premiums, contributions, etc., to the Tax Department.

 The data thus provided includes:

Salary, interest (from savings accounts, FDs, etc.), and dividend income, if any.

LIC premiums paid in a year and maturity/claims paid.

PF contributions and funds drawn during the said year.

Details of Securities and Mutual Fund transactions.

High-value transactions involving property purchases/sales and large cash deposits/withdrawals.

Foreign Remittances and purchases of foreign currency.

Details of tax payments like TDS, TCS, advance tax, and self-assessment tax.

Any other financial transactions executed during that year with other entities.

2. Taxpayer Information Summary (TIS): 

The AIS is accompanied by a simplified summary called the TIS, which provides an aggregated, category-wise view of your financial data. This summary enables the calculation of Income Tax dues and the balance amount of tax payable. 

The derived value from TIS is used for pre-filling your ITR.

3. Feedback Mechanism for Rectification and Claims

Taxpayers can submit online feedback if they find any incorrect, duplicated, or unfamiliar information in the AIS. 

This feature helps in reconciling data and ensures accuracy before filing the ITR.

4. Accessibility and Available Formats for Download

The AIS can be accessed via the official Income Tax e-filing portal (navigating to the Annual Information Statement under the "Services" tab).

It can be downloaded in various formats, including PDF, JSON, and CSV. 

A mobile app, "AIS for Taxpayer," is also available and can be downloaded from the Google Play Store or the Apple App Store.

AIS vs. Form 26AS

AIS is an extension and a more detailed version of the traditional Form 26AS. While Form 26AS primarily focuses on TDS/TCS details, AIS captures a much wider array of financial information, often including transactions where no tax was deducted. 

Form 26AS is the old format, which has been revamped and enhanced into a comprehensive format type now designated as the Annual Information Statement.

Form 26AS may become obsolete in due course.

Importance of AIS for Taxpayers

Reviewing your AIS is crucial before filing your ITR to ensure all income sources are accurately reported, which helps in:

• Avoiding omissions or under-reporting of income
• Minimizing the risk of receiving tax notices from the Income Tax Department
• Ensuring that the tax credits claimed match the data available to the tax authorities. 

You can access your AIS from the IncomeTax Portal or through the mobile app.