India Tax Residency Certificate (TRC): How to Obtain Form 43 and Reduce Foreign Withholding Tax
An India Tax Residency Certificate (TRC) — issued in Form 43 by the Indian Income Tax Department — is an official document confirming that an individual or company is a tax resident of India for a specific financial year. It is the primary document that Indian residents need to provide to foreign clients, banks and tax authorities to claim benefits under India’s Double Taxation Avoidance Agreements (DTAA) — including reduced or nil withholding tax on income such as software service fees, royalties, interest and dividends paid from the US, UK, UAE, Singapore, Germany and over 90 other countries. Without a valid Indian TRC, foreign payers may deduct withholding tax at their full domestic rate — which can be 15% to 30% of gross payment. Sorting Tax assists Indian individuals and companies in obtaining Form 43 from the Income Tax Department efficiently.
What is an India Tax Residency Certificate (TRC)?
An India Tax Residency Certificate (TRC) is an official certificate issued by the Income Tax Department of India confirming that the applicant — whether an individual or a company — is a resident of India for tax purposes for a specified financial year.
The TRC is governed by Section 159 of the Income Tax Act, 2025, read with Rule 75 of the Income Tax Rules, 2026. An Indian resident applies for a TRC by submitting Form 42 to their Jurisdictional Assessing Officer (AO). If the AO is satisfied with the application, the TRC is issued in Form 43.
An India TRC is required primarily for two purposes:
- Claiming DTAA Benefits Abroad: When an Indian resident (individual or company) receives income from a foreign country — such as software service fees, royalties, interest, dividends or consulting fees — the foreign payer is often required under their domestic law to deduct withholding tax (WHT) on such payments. By presenting a valid Indian TRC, the Indian resident can ask the foreign payer to apply the lower DTAA rate instead of the higher domestic rate.
- Avoiding Double Taxation: India has DTAAs with over 90 countries. The TRC is the standard proof of Indian tax residency recognised by foreign tax authorities and foreign payers for the purpose of applying these treaty benefits.
The TRC is valid for one financial year (April 1 to March 31) and must be renewed annually.
Why Do Indian Companies and Individuals Need an India TRC?
Without a valid India TRC, the following consequences apply for Indian residents earning income from foreign sources:
Higher Foreign Withholding Tax: Foreign payers are generally required to deduct withholding tax on payments to Indian residents. Without a TRC, they cannot verify Indian tax residency and cannot apply the lower DTAA rate — so they default to their domestic withholding tax rate. In countries such as the US (30%), Germany (25%) and Netherlands (25%), the domestic WHT rate is significantly higher than the applicable DTAA rate.
Tax Refund Process: If excess WHT is deducted because a TRC was not provided, the Indian resident must file a tax return in the foreign country and claim a refund. This is time-consuming — foreign tax refunds can take 12 to 24 months — and in many countries requires engaging a local tax advisor.
Banking and KYC Requirements: Many foreign banks and financial institutions ask for a TRC as part of their KYC / account opening process or when processing large cross-border payments. It is also required when opening investment accounts in some jurisdictions.
Required alongside Form 10F: From the other side of the transaction, when a foreign company provides services to an Indian customer and provides their TRC to the Indian payer, the Indian payer requires the foreign TRC alongside Form 10F. In the same way, an Indian company providing services to a foreign payer needs an Indian TRC to give to that foreign payer.
Documents Required to Obtain an India TRC (Form 42 Application)
There are no documents prescribed as mandatory attachments under Rule 75. However, since the basis of Indian tax residency is the number of days spent in India during the financial year, the following documents are recommended to be submitted alongside Form 42:
For Individuals:
- PAN Card
- Passport — pages showing all entry and exit stamps for the relevant financial year
- A statement of days of stay in India during the financial year (calculated from passport entries and air tickets)
- Air tickets — particularly where electronic boarding pass / smart gate entry was used (no stamp on passport)
- Previous year’s Income Tax Return (ITR) — to demonstrate Indian tax residency
- Address proof in India
- Details of income earned from foreign countries and countries involved
For Companies:
- PAN of the company
- Certificate of Incorporation
- Memorandum and Articles of Association
- Proof of registered office address in India
- Previous year’s ITR / audited financial statements
- Details of income earned from foreign countries and the purpose for which TRC is required
The Assessing Officer may call for additional documents or clarifications. Complete and consistent documentation avoids delays.
Who is Eligible for an India TRC — Individuals
An individual is eligible to apply for an India Tax Residency Certificate if they are a ‘Resident’ of India under Section 6 of the Income Tax Act, 2025. Residency for an individual is determined by the number of days of physical presence in India during the financial year:
Resident and Ordinarily Resident (ROR) — Full DTAA Eligibility:
An individual is a Resident and Ordinarily Resident (ROR) of India if:
(a) They were present in India for 182 days or more during the financial year; OR
(b) They were present in India for 60 days or more during the financial year AND 365 days or more in the four preceding financial years.
An ROR individual is eligible to apply for a TRC and can claim full treaty benefits.
Resident but Not Ordinarily Resident (RNOR):
An individual who satisfies the day-count tests but has been a non-resident in 9 out of the 10 preceding years, or has been in India for 729 days or less in the 7 preceding years, is RNOR. RNOR status has implications for the scope of Indian taxation — please seek professional advice on DTAA eligibility if you are RNOR.
Non-Residents:
Non-residents are not eligible to obtain an Indian TRC. They should obtain a TRC from their country of residence and file Form 42 with their Indian customer to claim DTAA benefits from Indian payers.
Note: Indian citizens who are members of a crew of a ship, or who are outside India for employment, may have different day-count rules. Seek advice on your specific situation.
Who is Eligible for an India TRC — Companies and Other Entities
A company or other entity is eligible to apply for an India TRC if it is a ‘Resident’ of India under Section 6 of the Income Tax Act, 2025.
Indian Companies:
A company incorporated in India is automatically a resident of India under Section 6(10)(a)(i). All Indian-incorporated companies — private limited, public limited, LLP (for treaty purposes as applicable), partnership firms and other entities — are eligible to apply for an India TRC.
Foreign Companies — Place of Effective Management (POEM):
A foreign company is treated as a resident of India if its Place of Effective Management (POEM) is in India during the financial year. POEM is defined as the place where key management and commercial decisions necessary for the conduct of business are in substance made. Foreign companies that are effectively managed from India are eligible for an India TRC — though such companies should seek professional advice as POEM determination is a fact-intensive exercise.
What the TRC Enables for Indian Companies:
An Indian IT company, for example, that provides software services to US clients can present an India TRC to its US clients to apply the India-US DTAA rate (typically 15% or lower depending on the treaty article) rather than the US domestic withholding tax rate of 30%. On a USD 1,000,000 contract, this saves USD 150,000+ in excess WHT.
How to Obtain an India TRC — Form 42 to Form 43: Step by Step
Step 1 — Determine Eligibility and Financial Year:
Confirm that you (or your company) qualify as a Resident of India under Section 6 of the Income Tax Act for the financial year for which the TRC is required. The TRC is issued for one financial year only (1 April to 31 March). Apply for the year in which the foreign income was earned.
Step 2 — Locate Your Jurisdictional Assessing Officer (AO):
Log in to the Income Tax e-filing portal (incometax.gov.in) using your PAN credentials. Your Jurisdictional Assessing Officer details are displayed on the portal. Note the AO’s name, designation, ward and address — you will need these to submit the application.
Step 3 — Fill Form 42:
Download Form 42 from the Income Tax India website. Fill in the following details:
- Name and address of the applicant
- Status (Individual / HUF / Company / Firm etc.)
- PAN
- Nationality (for individuals) or Country of Incorporation (for companies)
- Tax Identification Number in foreign country (if applicable)
- Period for which TRC is required
- Purpose for which TRC is required (specify the country and the income type)
- Basis on which Indian residency is claimed (number of days in India / incorporation in India)
Step 4 — Prepare Supporting Documents:
Attach passport copies, day-count statement, ITR, and any other documents supporting Indian residency. While no documents are prescribed as mandatory, complete documentation avoids delays and queries from the AO.
Step 5 — Submit to Assessing Officer:
Submit Form 42 along with supporting documents to your Jurisdictional AO — either in person at the AO’s office or via the Income Tax portal (where electronic submission is available). Obtain an acknowledgement of submission.
Step 6 — AO Review and Issuance of Form 43:
The Assessing Officer reviews the application. If satisfied, the AO issues the Tax Residency Certificate in Form 43. Processing time is typically 15 to 30 working days depending on the AO’s office and workload.
Step 7 — Provide TRC to Foreign Payer:
Once Form 43 is received, provide it to your foreign client or payer. The foreign payer uses it to apply the lower DTAA withholding tax rate on payments to you. Some countries may require an apostille or notarisation of the TRC — confirm with your foreign client.
Sorting Tax handles the complete process — from eligibility assessment and Form 42 preparation to AO follow-up and delivery of Form 43.
Legal Framework — India Tax Residency Certificate
The India Tax Residency Certificate is governed by the following provisions:
Section 159 of the Income Tax Act, 2025:
Empowers the Central Government to enter into DTAAs with foreign countries. Sub-section 159(8) and 159(9) require non-residents claiming DTAA benefit in India to furnish a TRC from their country of residence. Sub-section 159(9) specifies what information the TRC must contain.
Section 159 of the Income Tax Act, 2025:
Extends the same TRC requirement to agreements with specified associations (not just sovereign governments). The provisions for Indian residents obtaining TRC are symmetrically applicable under Section 159.
Rule 75 of the Income Tax Rules, 2026:
Prescribes the procedure for obtaining a Tax Residency Certificate. It provides that an Indian resident shall apply in Form 42 to the Assessing Officer, and the AO shall issue the TRC in Form 43 on being satisfied with the particulars.
Section 6 of the Income Tax Act, 2025:
Defines the criteria for determining Indian residency — including the day-count tests for individuals (182 days / 60 days + 365 days) and the incorporation / POEM tests for companies.
Finance Act 2012 — Introduction of Mandatory TRC:
The Finance Act 2012 introduced the mandatory requirement for a TRC into Indian tax law — making it compulsory for non-residents seeking DTAA benefits in India to furnish a TRC. Symmetrically, Indian residents were given the mechanism to obtain their own Indian TRC for presenting to foreign tax authorities.
India’s DTAA Network:
India has DTAAs with over 90 countries including the US, UK, UAE, Singapore, Germany, Netherlands, Australia, Japan and France. The applicable DTAA determines the reduced WHT rate available to Indian residents on income from those countries.
Real-World Examples: How an India TRC Reduced Foreign Withholding Tax
Example 1 — Indian IT Company, US Client
ABC Technologies Pvt. Ltd., a Bengaluru-based software company, provided development services to a US client for USD 500,000. The US client initially withheld 30% WHT (USD 150,000) under US domestic law before releasing the net payment. ABC Technologies obtained an India TRC (Form 43) through Sorting Tax and provided it to the US client. The US client revised the WHT to the applicable India-US DTAA rate — avoiding the need to file a US tax return to claim a refund.
Example 2 — Indian Professional, German Consultancy Fee
Mr. A, a resident Indian consultant, received consulting fees from a German company for advisory services. The German company deducted 25% WHT under German domestic law. Mr. A obtained an India TRC through Sorting Tax and provided it to the German company for the next payment cycle. The German company applied the India-Germany DTAA rate of 10% on subsequent payments — saving Mr. A 15% on each payment.
Example 3 — Indian Holding Company, Netherlands Dividend
PQR Holdings Pvt. Ltd. received dividends from its wholly owned subsidiary in the Netherlands. Without an India TRC, the Dutch subsidiary withheld 25% WHT. PQR Holdings obtained Form 43 and provided it to the Dutch subsidiary — enabling application of the India-Netherlands DTAA rate of 10% on subsequent dividends.
Sorting Tax has obtained India TRCs for individuals and companies across a wide range of income types and counterparty countries including the US, UK, UAE, Germany, Singapore, Australia and Japan.
Conclusion
An India Tax Residency Certificate is not optional — it is the key document that determines whether your foreign client deducts withholding tax at 30% or at the significantly lower DTAA rate. For Indian IT companies, consultants, researchers and exporters earning income from the US, UK, Germany, Singapore and other treaty countries, the TRC is the difference between receiving the right net payment and spending months claiming a refund from a foreign tax authority.
The application process — Form 42 to the Jurisdictional Assessing Officer, followed by issuance of Form 43 — is straightforward when the supporting documentation is correctly prepared. The most common reasons for delay are incomplete documentation, incorrect AO jurisdictional details or mismatches in applicant information.
Sorting Tax handles the complete India TRC process for individuals and companies — from determining eligibility and preparing Form 42 to following up with the AO and obtaining Form 43. We also provide the complete outbound DTAA compliance package and can advise on whether your income type qualifies for DTAA benefit in the specific country concerned.
Contact us today using the details below or click the WhatsApp button to speak with our team.
FAQ — India Tax Residency Certificate (Form 43)
What is an India Tax Residency Certificate (TRC)?
An India Tax Residency Certificate (TRC) is an official certificate issued by the Indian Income Tax Department confirming that an individual or company is a tax resident of India for a specific financial year. It is issued in Form 43 under Rule 75 of the Income Tax Rules. Indian residents use it to claim DTAA benefits abroad — primarily to obtain a lower withholding tax rate on income received from foreign countries such as the US, UK, UAE, Germany and Singapore.
Who issues the India TRC and what form is it in?
The India TRC is issued by the Jurisdictional Assessing Officer (AO) of the Income Tax Department. The applicant applies in Form 42. The AO, on being satisfied with the application and supporting documents, issues the TRC in Form 43.
How is an India TRC different from Form 10F?
Form 10F is filed by a non-resident on the Indian income tax portal — it is submitted to an Indian payer so the Indian payer can apply the lower DTAA TDS rate on payments to the non-resident. An India TRC (Form 43) is obtained by an Indian resident from the Income Tax Department — it is given to a foreign payer so the foreign payer can apply the lower DTAA WHT rate on payments to the Indian resident. The two documents are mirror images: one for inbound flows (Form 10F), one for outbound flows (India TRC).
Who is eligible to apply for an India TRC?
Any individual or company that is a Resident of India under Section 6 of the Income Tax Act, 2025 is eligible. For individuals, this means 182 days or more of physical presence in India during the financial year (or 60 days plus 365 days in the preceding 4 years). For Indian-incorporated companies, incorporation in India is sufficient. Non-residents are not eligible for an Indian TRC — they should obtain a TRC from their country of residence.
How long does it take to obtain an India TRC?
Processing time depends on the Assessing Officer’s office and workload. If the application and documents are complete, Form 43 is typically issued within 15 to 30 working days. Delays are common if documents are incomplete or if the AO raises queries. Sorting Tax follows up with the AO’s office to minimize delays.
For which financial year is the India TRC issued?
The India TRC is issued for one financial year — from 1 April to 31 March. If you need to claim DTAA benefit for income received across multiple financial years, you will need a separate TRC for each year. The TRC cannot be issued for a future financial year.
What information does Form 43 (India TRC) contain?
Form 43 contains: the name and address of the applicant; PAN; status (individual, company etc.); nationality or country of incorporation; Tax Identification Number in the foreign country (if applicable); and the period for which the certificate is valid. Some foreign tax authorities require the TRC to contain specific information — if their required fields are not included in Form 43, those details may also need to be confirmed separately with the foreign authority.
Can an Indian LLP or partnership firm obtain an India TRC?
Yes, in principle — Rule 75 applies broadly to resident assessees including firms. However, treaty eligibility for LLPs and partnership firms may depend on how those entities are treated under the applicable DTAA — some treaties do not expressly cover partnerships or treat them as fiscally transparent. Seek professional advice on whether your specific entity type qualifies for treaty benefit in the target country.
Does an India TRC need to be apostilled or notarized for foreign countries?
It depends on the foreign country’s requirements. Some countries, particularly in Europe, require Indian government documents to be apostilled under the Hague Convention before their tax authorities will accept them. Others accept Form 43 as issued. Sorting Tax can advise on the requirements of the specific country where your income originates and assist with apostille if required.
Can I get an India TRC if I was outside India for most of the financial year?
If you were outside India for most of the financial year you may not qualify as a resident under Section 6 and therefore may not be eligible for an Indian TRC. If you do not qualify as an Indian resident for a particular year, you would need to obtain a TRC from the country where you were resident during that year and file Form 10F with your Indian payers for inbound income. Sorting Tax can assess your specific residency position.
What happens if the foreign country does not recognise the India TRC format?
Most countries with a DTAA with India recognise Form 43 as the standard Indian TRC. However, some foreign tax authorities use their own standard forms that they require to be certified by the Indian tax authority. These international form certification requests must be submitted separately to the AO alongside Form 42. Sorting Tax can handle these requests.
Is there a fee to obtain an India TRC?
There is no prescribed government fee for obtaining an India TRC. Form 42 is submitted to the Assessing Officer without a payment of fee. Professional fees may apply if you engage a tax consultant such as Sorting Tax to prepare and file the application and follow up with the AO.
Can the India TRC be obtained online?
The Income Tax portal (incometax.gov.in) allows you to identify your Jurisdictional Assessing Officer online. The availability of online Form 42 submission may vary by AO jurisdiction — some offices accept portal submissions while others require physical submission. Please check the current portal facility or contact Sorting Tax for the latest practice in your jurisdiction.
What is the difference between ROR and RNOR for TRC purposes?
Both Resident and Ordinarily Resident (ROR) and Resident but Not Ordinarily Resident (RNOR) individuals are technically resident in India and can apply for a TRC. However, RNOR individuals have a more limited scope of Indian taxation — their foreign income is generally not taxable in India. Some DTAAs have specific provisions on which residents are entitled to treaty benefits. If you are RNOR, seek professional advice on whether you are entitled to full DTAA benefits in the relevant foreign country.
Can Sorting Tax help obtain an India TRC?
Yes. Sorting Tax assists Indian individuals and companies in obtaining India TRC (Form 43) from the Jurisdictional Assessing Officer. We handle the complete process — eligibility assessment, Form 10FA preparation, document compilation, submission to the AO and follow-up until Form 43 is issued. We also advise on the applicable DTAA rates for your income type and country, and on whether apostille is required for the foreign country concerned.
