PAN card is not necessary to claim TDS, which taxpayers have been exempted by the Income Tax Department

The Income Tax Department has allowed non-resident taxpayers who do not have a Permanent Account Number (PAN) to manually fill Form 10F till March 31, 2023. This will reduce the burden of this exercise required for TDS exemption for non-resident taxpayers and they will be able to claim a lower TDS (Tax Deducted at Source) rate. The Central Board of Direct Taxes (CBDT) in July made it mandatory for non-resident taxpayers to electronically file Form 10F to claim the benefit of lower TDS.

However, taxpayers were facing problems in filing the form electronically as the income tax portal was not allowing taxpayers who do not have PAN to file 10F. CBDT said in a notification that to overcome the problems of such taxpayers, it has been decided that those taxpayers who do not have PAN are exempted from filling 10F electronically till March 31, 2023. Such taxpayers are not required to have Permanent Account Number under the relevant provision of the Income Tax Act.

What do experts say
According to the notification issued on December 12, “Such category of taxpayers will be able to file Form 10F manually till March 31, 2023, in the same manner as they were doing prior to the notification issued in July.” Taxes at Nangia Andersen LLP Partnership Sandeep Jhunjhunwala said, “The exemption from the CBDT notification will reduce the compliance burden for NRIs who were facing them for filing Form 10F electronically. He said that but this exemption is only till March 31, 2023, so when this process becomes digital again, it will be interesting to see how the NRIs will deal with it.

Electronic filing was made mandatory in July
In July 2022, the CBDT issued an order saying that if non-resident taxpayers want to avail the benefit of lower TDS, they will have to fill Form 10F electronically as well. However, in this way such taxpayers who do not have PAN card will not be able to fill the form.

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