Tax Residency Certificate: New Form 42 & 43 Under Rule 75

Introduction

A Tax Residency Certificate (TRC) is usually the first document that comes up when dealing with international transactions. It is proof that a person or entity is a tax resident of India. This certificate is important because it is required in two common situations: first, when an Indian resident wants to claim relief under a Double Taxation Avoidance Agreement (DTAA) in another country, and second, when a foreign tax authority or business partner asks for confirmation of residency. In both cases, the TRC serves as the main evidence of residency.

The Legal Basis: Rule 75 of the Income-tax Rules, 2026

Rule 75 sets out the documents and information that a resident taxpayer must provide to get a Tax Residency Certificate (TRC) from the Income Tax Department. In practice, the rule continues the same framework that existed earlier under Rule 21AB. The change is mainly a renumbering exercise as part of the wider restructuring of the Income-tax Rules, 2026, and not a major change in how residency certification works. For tax professionals who already know the requirements under the old Rule 21AB, the obligations remain almost the same. What is new are the updated form numbers, the shift to a fully online filing process, and a few small procedural improvements.

Who Should File Form No. 42

Any person who is a resident taxpayer in India and needs to prove their residency — whether to claim benefits under a Double Taxation Avoidance Agreement (DTAA) in another country, or to meet the requirement of a foreign tax authority or business partner — must file Form 42. This requirement applies to individuals, companies, firms, and all other types of taxpayers, as long as the residency claim relates to India.

There is no fixed deadline for filing Form 42. A taxpayer can apply for a Tax Residency Certificate (TRC) whenever it is needed. However, there is one important restriction: only one Form 42 can be filed for each tax year, and the certificate is always issued on a tax-year basis.

This has a practical impact. If a taxpayer needs a TRC for a period that covers more than one tax year, they cannot make a single application. Instead, they must file separate Form 42 applications for each relevant tax year. For example, if a taxpayer has foreign dealings that span two or three years, they must plan ahead and apply year by year.

The Filing Process

• Login with PAN on the e-Filing portal.
• Select the tax year for which the TRC is sought.
• Complete Form No. 42, specifying the exact period within the tax year for which the certificate is required. As noted above, a TRC is issued only on a tax-year basis, so the period specified must fall within a single tax year.
• Upload supporting documents, which include:
• Passport (for individuals) or other proof of stay in India;
• Certificate of incorporation or registration (for entities other than individuals); and
• Any other information relevant to establishing the residency claim.
• Verify the form electronically to complete the filing.

Structure of Form No. 42

The form itself is organised into four broad parts:

• Taxpayer identification particulars — Name, PAN, Communication address, e-mail, and similar identifying details.
• Residency particulars — the period for which the TRC is required, the basis on which resident status is being claimed, and the taxpayer’s address during the period for which the TRC is sought.
• Document upload options — a dedicated section listing the supporting documents to be annexed with the application.
• Verification — the concluding declaration/verification statement.
• Key Enhancement: Document Upload at the Application Stage

A notable procedural improvement over the earlier regime is that supporting documents — the passport or proof of stay, the certificate of incorporation, and any other relevant material — are now required to be uploaded along with the Form No. 42 application itself, rather than being called for separately during processing. This is intended to enable the Assessing Officer to process the application more quickly, reducing the back-and-forth that often accompanied TRC requests under the earlier paper-based or semi-digital process.

The Outcome: Form No. 43 (Erstwhile Form 10FB)

Once Form No. 42 is processed by the Assessing Officer, the Department issues the Tax Residency Certificate itself in Form No. 43 — the renumbered successor to the erstwhile Form 10FB. Importantly, the TRC issued in Form No. 43 is now made available directly on the e-Filing portal, allowing the taxpayer to access and download it without needing a separate physical or manual dispatch from the Department. This portal-based availability is a meaningful convenience for taxpayers and their advisors who need to furnish the TRC promptly to a foreign tax authority, treaty partner, or counterparty — particularly where time-bound DTAA claims are involved.

Practical Takeaways for taxpayers

• Plan around the one-per-year limit. Where a client’s cross-border engagement spans multiple tax years, calendar separate Form No. 42 filings for each year well in advance of when the TRC will actually be needed abroad.
• Prepare documentation upfront. Since documents must now accompany the application rather than follow later, advisors should assemble the passport/proof-of-stay or incorporation documents, along with any ancillary evidence of residency, before initiating the online filing.
• Track the e-Filing portal for issuance. Because Form No. 43 is delivered through the portal, building a habit of periodically checking portal status after filing Form No. 42 will help avoid delays in furnishing the TRC to the requesting foreign authority.
• Cross-reference with the DTAA requirement. Since the TRC is frequently a threshold condition for treaty relief, it is worth confirming the specific residency-period and documentation requirements of the relevant DTAA and the foreign counterpart’s expectations before finalising the period specified in Form No. 42.

Conclusion

The shift from Form 10FA/10FB to Form No. 42/43 under Rule 75 of the Income-tax Rules, 2026 is, at its core, a renumbering and digitisation exercise rather than a substantive rewrite of the TRC framework. The essential conditions — resident status, tax-year-wise certification, and one application per tax year — remain unchanged. What has genuinely improved is the taxpayer experience: documents are now uploaded at the outset for faster processing, and the certificate itself is retrievable directly from the e-Filing portal. For practitioners advising on outbound income streams and treaty claims, the practical discipline required is largely the same as before — early planning, complete documentation, and year-wise tracking — now housed within a more integrated digital workflow.