The Indian parliament passed the Finance Bill for 2013-14 on April 30th. It clarified that tax residency certificates issued by foreign governments will be accepted as proof of residency for non-resident taxpayers claiming benefits under double taxation avoidance agreements. However, the government reserves the right to request additional documentation. The Finance Bill 2013 had sought to amend a 2012 provision making tax residency certificates not adequate for claiming treaty benefits, causing concern for non-residents. This issue has now been clarified.

1. India Passes Finance Bill for 2013-14: Updates from Nair & Co.’s International Tax Consulting
Team
(Sunnyvale, CA)- The Indian parliament cleared the Finance Bill on April 30, 2013. It has issued a clarification regarding Tax
Residency Certificates (TRC) issued by a foreign government. These will be accepted as a proof of residence for a non-resident
taxpayer, who wants to claim benefits under a Double Taxation Avoidance Agreement (DTAA). However the government
reserves the right to ask for additional documentation and information if required, says Nair and Co’s International Finance, Tax
and Accounting Department.
In the Finance Act, 2012, the government made it obligatory for taxpayers to provide TRC for obtaining benefits under the
DTAAs. However, the Finance Bill 2013 was seeking to amend this provision by making the TRC not an adequate condition for
claiming benefits under DTAAs. This had caused alarm to the non-resident taxpayers. However the issue has been clarified now.
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