If an Australian company receives royalty or Fee for Technical Services (FTS) payments from India, it must file Form 10F along with a Tax Residency Certificate (TRC) to claim the reduced withholding tax rate under the India-Australia Double Taxation Avoidance Agreement (DTAA). Without Form 10F, the Indian payer is required to withhold tax at the higher domestic rate of 20% (plus surcharge and cess) instead of the treaty rate of 10% or 15%. Form 10F must be filed electronically on India's Income Tax e-filing portal, which requires the foreign company to obtain a PAN card in India, a DSC (Digital Signature Certificate) of the foreign authorised signatory, and an active income tax login.

• DTAA treaty rate for royalties under India-Australia DTAA: 10%–15% (depending on the type of royalty)
• Domestic TDS rate without DTAA benefit: 20% + surcharge + cess under Section 115A of the Income Tax Act, 1961
• Form 10F must be filed for each financial year in which royalty income is received
• If DTAA benefit is claimed by the foreign company, filing an ITR in India is mandatory

What is Form 10F and Why is it Required for Australia-India Royalty Payments?

Form 10F is a self-declaration form prescribed under Rule 21AB of the Income Tax Rules, 1962, read with Section 90(5) of the Income Tax Act, 1961. It is required when a non-resident (including an Australian company) claims a lower rate of tax under a DTAA with India and the Tax Residency Certificate (TRC) issued by the foreign tax authority does not contain all the information prescribed under Indian law.

In the context of royalty payments from Indian companies to Australian entities, Form 10F serves as supplementary documentation to the TRC. It confirms key details such as the taxpayer's status, residential status in Australia, tax identification number, period of residential status, and address during the relevant period. The Central Board of Direct Taxes (CBDT) mandated electronic filing of Form 10F from November 2022 onwards, making PAN registration and an income tax login in India compulsory even for foreign companies with no permanent establishment in India.

Key Purposes of Form 10F

• Supplements the TRC when it lacks prescribed information required under Indian tax rules
• Confirms the foreign entity's residential status and tax identification details
• Enables the Indian payer to apply the lower DTAA withholding tax rate instead of the Section 115A domestic rate
• Serves as documentary evidence during income tax scrutiny or TDS compliance audits

What Does the India-Australia DTAA Say About Royalty Taxation?

The India-Australia Double Taxation Avoidance Agreement (signed in 1991 and periodically updated) contains specific provisions governing the taxation of royalties and fees for technical services paid from one country to a resident of the other. Under Article 12 of this treaty, royalties arising in India and paid to an Australian resident are taxable in both countries, but India's withholding tax is capped at the treaty rate.

Type of Payment	Domestic Rate (Section 115A)	DTAA Rate (Australia-India)	Form 10F Required?
Royalty (industrial/commercial)	20% + surcharge + cess	10%	Yes
Royalty (copyright on literary/artistic work)	20% + surcharge + cess	15%	Yes
Fee for Technical Services (FTS)	20% + surcharge + cess	10%–15%	Yes

Important note on Section 115A: An Australian company receiving royalty from India may choose to pay tax at the flat rate of 20% under Section 115A without filing an ITR in India. However, if it claims a lower DTAA rate through Form 10F and TRC, filing an Income Tax Return (ITR) in India becomes mandatory as per the provisions of the Income Tax Act and CBDT guidelines.

Complete Checklist: Form 10F Requirements for Australian Companies

To successfully claim the DTAA benefit on royalty payments from India, an Australian company must compile and submit the following documents. Taxocity provides end-to-end support for foreign companies in meeting all these compliance requirements.

1. Tax Residency Certificate (TRC)

A valid TRC must be obtained from the Australian Taxation Office (ATO) certifying that the recipient is a tax resident of Australia for the relevant financial year. The TRC must be current and cover the period in which the royalty income is received. If the TRC does not contain all information required under Indian law (such as the taxpayer's address in Australia, status, nationality, tax identification number, and period of residential status), Form 10F must be filed to supply the missing details.

2. Form 10F (Electronic Filing on Income Tax Portal)

Form 10F must be filed electronically on the Income Tax e-filing portal (www.incometax.gov.in). The key information to be provided includes:

• Status of the foreign entity (individual, company, firm, etc.)
• Nationality (for individuals) or country of incorporation
• Tax Identification Number in Australia
• Period for which residential status in Australia is applicable
• Address of the foreign entity in the country of residence during the period

3. PAN Card (Permanent Account Number) in India

To file Form 10F electronically, the foreign company must first obtain a PAN card in India. This is mandatory even if the Australian company has no operations, office, or permanent establishment in India. PAN enables the creation of an income tax login on the Indian portal. The PAN application for a foreign company requires submission of incorporation documents, a registered address, and an authorised representative's details.

4. Income Tax Login on the Indian Portal

An active account on India's income tax e-filing portal is necessary to file Form 10F online. The login is linked to the company's PAN. Registration requires OTP verification, and once the account is active, the authorised signatory can file Form 10F electronically.

5. Digital Signature Certificate (DSC) of the Foreign Authorised Signatory

Electronic filing of Form 10F (and the subsequent ITR, if applicable) requires a Digital Signature Certificate (DSC) of the authorised signatory of the foreign company. It is important to note that the regular DSC of an Indian director or partner does not work here. A fresh DSC must be obtained in the name of the foreign (Australian) authorised signatory. To obtain this DSC, the following are required:

• Email OTP and phone OTP from the foreign individual
• Video verification of the foreign individual
• Address proof (e.g., driving licence, utility bill)
• Photograph of the individual
• Copy of passport of the authorised signatory

6. No Permanent Establishment (No PE) Declaration

A declaration confirming that the Australian company does not have a Permanent Establishment (PE) in India is required. A PE in India would subject the company to broader Indian tax obligations and negate the benefit of DTAA reduced rates on royalties.

7. Income Tax Return (ITR) Filing in India (If DTAA Benefit is Claimed)

If the Australian company claims the benefit of the lower DTAA rate (rather than paying tax at 20% under Section 115A), it is mandatory to file an ITR in India. The ITR is typically filed as a foreign company in the applicable form. This is a compliance obligation that many foreign entities overlook, and non-compliance can result in penalties and interest. Taxocity's tax experts assist Australian companies in ITR filing, TDS reconciliation, and certificate issuance.

Step-by-Step Process: How an Australian Company Claims DTAA Benefit on Royalty from India

Step 1: Obtain TRC from Australian Taxation Office

The Australian company applies to the ATO for a Tax Residency Certificate covering the relevant Indian financial year (April to March). The ATO typically issues this as a "Certificate of Residency."

Step 2: Apply for PAN Card in India

Submit Form 49AA (the PAN application form for foreign entities) along with supporting documents to the Income Tax Department through a designated authority. Taxocity handles this process on behalf of the foreign company.

Step 3: Register on the Income Tax e-Filing Portal

Once PAN is received, the foreign company registers on www.incometax.gov.in using the PAN as the user ID. The authorised signatory's email and phone are linked to the account.

Step 4: Obtain DSC of the Foreign Authorised Signatory

Apply for the DSC of the Australian authorised signatory through a licensed Certifying Authority in India. The DSC is required for signing Form 10F and the ITR digitally.

Step 5: File Form 10F Electronically

Log in to the income tax portal and file Form 10F for the relevant financial year, providing all required details about the company's tax residency, identification number, and address in Australia.

Step 6: Submit TRC, Form 10F, and No PE Declaration to the Indian Payer

Provide the Indian company making the royalty payment with: the TRC, the acknowledgment of electronically filed Form 10F, and the No PE Declaration. The Indian payer can then apply the lower DTAA withholding rate (10% or 15%) while deducting TDS under Section 195.

Step 7: File ITR in India (If DTAA Benefit Claimed)

File the Income Tax Return in India before the due date. For foreign companies without a business connection beyond royalty income, the ITR due date is generally 31 October of the assessment year (or as extended by CBDT). The ITR discloses the royalty income, TDS deducted, and claims the DTAA benefit formally on record.

TDS Rates on Royalty Payments to Australian Companies: A Quick Comparison

Scenario	Applicable Section	Tax Rate (Royalty)	ITR Filing in India
No DTAA benefit claimed (default domestic rate)	Section 115A	20% + surcharge + cess	Not mandatory
DTAA benefit claimed with Form 10F + TRC	India-Australia DTAA, Article 12	10%–15%	Mandatory

Note for individuals vs. companies: The surcharge applicable to foreign companies on royalty income under Section 115A is 2% (if income exceeds Rs. 1 crore but does not exceed Rs. 10 crore) and 5% (if income exceeds Rs. 10 crore), plus a 4% health and education cess on the tax and surcharge. For foreign individuals, the surcharge rates differ based on total income slabs. The DTAA rate of 10% or 15% is a flat rate without additional surcharge or cess when the treaty applies.

Common Mistakes to Avoid When Filing Form 10F for Australia-India DTAA

• Filing Form 10F offline: Since November 2022, CBDT mandates electronic filing only. Paper submissions are not accepted.
• Using an Indian director's DSC: Only the DSC of the foreign authorised signatory is valid for filing on behalf of the foreign company.
• Skipping ITR after claiming DTAA benefit: Claiming the treaty rate and not filing an ITR in India is a common non-compliance issue that attracts scrutiny.
• Expired or incorrect TRC: The TRC must be valid for the financial year in which royalty income is received. An expired TRC invalidates the DTAA claim.
• Missing No PE Declaration: Indian payers who deduct TDS without a No PE declaration may face disallowance during tax audits.
• Incorrect treaty article cited: Royalties and FTS are covered under different articles in the DTAA. Ensure the correct article is applied based on the nature of the payment.

How Taxocity Helps Australian Companies with Form 10F and DTAA Compliance

Taxocity, with over 45 years of tax and compliance expertise (since 1975) and a 4.8/5 rating from 5,000+ clients, offers a comprehensive DTAA compliance package for Australian companies receiving royalty or FTS payments from India. Our end-to-end support covers:

• PAN application for the foreign company in India
• Income tax portal registration and login setup
• Coordinating the DSC of the foreign authorised signatory (including video verification and document collection)
• Electronic filing of Form 10F on the income tax portal
• Drafting of No PE Declaration
• Filing of ITR in India for foreign companies claiming DTAA benefits
• Liaising with the Indian payer's finance and tax team for TDS certificate (Form 16A) reconciliation

Our 100% compliance guarantee means your Australian company is never at risk of missed filings or incorrect TDS deductions. You deal with real human experts who understand both Indian tax law and cross-border transaction complexities.

Talk to a DTAA Compliance Expert at Taxocity Today and ensure your royalty payments from India are taxed at the correct treaty rate, with all filings done on time.

You may also find these related services useful:

• GST Registration in India - for Australian companies supplying digital services/royalties to India
• GST Filing - ongoing GST return compliance for foreign entities registered in India

Frequently Asked Questions: Form 10F for Australia-India Royalty Payments

Is Form 10F mandatory even if the TRC is complete?

If the TRC issued by the Australian Taxation Office contains all the information prescribed under Indian tax rules (status, nationality, TIN, period of residential status, and address), Form 10F may technically not be required. However, in practice, ATO certificates often do not include all the required fields in the format prescribed under Indian law, making Form 10F effectively mandatory in most cases. It is always advisable to file Form 10F as a safeguard.

Can a royalty payment be made without deducting TDS if Form 10F is not yet filed?

No. Under Section 195 of the Income Tax Act, TDS must be deducted at the applicable rate before remitting royalty payments to a non-resident. If Form 10F and TRC have not been submitted by the Australian company, the Indian payer must deduct TDS at the higher domestic rate of 20% (plus surcharge and cess) under Section 115A. The Australian company can later claim a refund by filing an ITR in India if excess TDS was deducted.

How long does it take to get PAN and file Form 10F for a foreign company?

Obtaining PAN for a foreign company typically takes 3 to 6 weeks. Setting up the income tax login, arranging the foreign DSC, and filing Form 10F can add another 2 to 4 weeks. Taxocity expedites this process with a structured document checklist and dedicated case managers, ensuring the process is completed as efficiently as possible.

Does an Australian individual (not a company) also need Form 10F for royalty income from India?

Yes. The Form 10F requirement applies to all non-residents, whether individuals or companies, who wish to claim DTAA benefits on income received from India. The documentation requirements are largely the same, though the DSC and PAN application process differs slightly for individuals.

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Disclaimer: This article is for informational purposes only and does not constitute tax advice. Tax laws and treaty provisions are subject to change, and their application depends on specific facts and circumstances. Please consult a qualified tax advisor or compliance expert before making any tax or compliance decisions related to cross-border royalty payments or DTAA claims.