Sub-section (4) of 90 and 90A provides that treaty benefit will not be available to any Non Resident unless he furnishes TRC from the Government of his country of residence containing such particulars as may be prescribed. The Finance Bill, 2013 had proposed to insert sub-section (5) in sections 90 and 90A to provide that TRC shall be a necessary but not a sufficient condition for claiming any relief under a DTAA.
The Finance Minister had subsequently clarified, by way of Press Release dated 1st March 2013, that the TRC issued by the Government of a foreign country would be accepted as evidence of tax residency and the tax authorities cannot go behind the TRC to question the residential status.
In order to incorporate the said clarification in the statute, sub-section (4) of sections 90 and 90A is proposed to be amended to substitute the words “a certificate containing such particulars as may be prescribed of his being a resident” with the words “a certificate of his being a resident”. Therefore, a certificate issued by the Government of a foreign country would constitute proof of tax residency, without any further conditions regarding furnishing of prescribed particulars therein.
Also, sub-section (5) of sections 90 and 90A which provided that TRC shall be a necessary but not a sufficient condition for claiming any relief under a DTAA is proposed to be substituted to provide that the assessee referred to under sub-section (4) of sections 90 and 90Ashall also provide such other documents and information, as may be prescribed.
Related Amendment to Finance Bill 2013 which presented in Lok sabha on 28.02.2013 and as passed by Lok Sabha on 30.04.2013
5. Page 12, after line 27, insert
(ba) in sub-section (4), for the words “a certificate, containing such particulars as may be prescribed, of his being a resident the words “a certificate of his being a resident” shall be substituted;’.
6. Page 12, for lines 30 to 32, substitute-
“(5) The assessee referred to in sub-section (4) shall also provide such other documents and information, as may be prescribed.”.
7. Page 12, after line 38, insert
“(ba) in sub-section (4), for the words “a certificate, containing such particulars as may be prescribed, of his being a resident”, the words “a certificate of this being a resident” shall be substituted;’.
8. Page 12, for lines 41 to 43, substitute-
“(5) The assessee referred to in sub-section (4) shall also provide such other documents and information, as may be prescribed.”
