If a French company receives royalty 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-France Double Taxation Avoidance Agreement (DTAA). The DTAA caps royalty withholding tax at 10%, compared to the standard rate of 20% under Section 115A of the Income Tax Act, 1961. To access this benefit, the French entity needs a valid TRC, Form 10F, a No PE Declaration, PAN in India, and an Income Tax login with a DSC of the authorised foreign signatory.

• India-France DTAA limits royalty withholding tax to 10% (vs. 20% under Section 115A)
• Form 10F must be filed online on the Indian Income Tax portal
• Foreign companies claiming DTAA benefit must file an ITR in India
• A DSC of the foreign authorised signatory (not a domestic director's DSC) is mandatory

What is Form 10F and Why is it Required?

Form 10F is a self-declaration form prescribed under Rule 21AB of the Income Tax Rules, 1962. It is filed by a non-resident payee (in this case, the French company) to substantiate the information provided in their Tax Residency Certificate (TRC). The Indian payer (the company making the royalty payment) relies on this declaration to apply the lower DTAA withholding rate instead of the default rate under domestic law.

The Central Board of Direct Taxes (CBDT) made online filing of Form 10F mandatory for non-residents claiming DTAA benefits. The form captures key details such as the taxpayer's status, nationality, tax identification number, period of residential status, and address in the country of residence.

India-France DTAA: Royalty Tax Rates at a Glance

The India-France Tax Treaty (signed in 1992, as amended) defines "royalty" broadly to include payments for the use of, or the right to use, copyrights, patents, trademarks, designs, models, plans, secret formulas, processes, software, and industrial/commercial/scientific equipment. Here is how the tax rates compare:

Tax Provision	Applicable Rate	Applicability
Section 115A of Income Tax Act	20% + surcharge + cess	When DTAA benefit is NOT claimed
India-France DTAA (Article 13)	10% of gross royalty amount	When DTAA benefit IS claimed with valid Form 10F + TRC
Fees for Technical Services (FTS) – Section 115A	20% + surcharge + cess	When DTAA benefit is NOT claimed
FTS under India-France DTAA	10% of gross amount	When DTAA benefit IS claimed with valid Form 10F + TRC

Important note: If the French company opts to pay tax under Section 115A and does NOT claim DTAA benefit, it is not required to file an ITR in India. However, the moment the company claims DTAA benefit to reduce the withholding rate to 10%, it becomes mandatory to file an Income Tax Return (ITR) in India.

Complete List of Form 10F Requirements for France-India Royalty Payments

To claim the reduced royalty rate under the India-France DTAA, the French company must assemble the following documents and complete the following registrations:

1. Tax Residency Certificate (TRC)

The TRC is issued by the French tax authorities (Direction Générale des Finances Publiques) confirming that the French company is a tax resident of France during the relevant financial year. The TRC must be valid for the period in which the royalty income arises. It must contain the taxpayer's name, address, status (company/individual), nationality, tax identification number, period of residential status, and the specific treaty being relied upon.

2. Form 10F

Form 10F must be filed online on the Indian Income Tax portal (e-filing portal: incometax.gov.in). The form self-certifies that the TRC is valid and that all information declared therein is correct. An authorised signatory of the French company must digitally sign the form using a valid Digital Signature Certificate (DSC).

3. PAN (Permanent Account Number) in India

The French company must obtain a PAN in India. This is a prerequisite for creating an Income Tax login on the e-filing portal. The PAN application is made using Form 49AA (for foreign entities). Without a PAN, neither an Income Tax login nor Form 10F can be filed online.

4. Income Tax Login on the Indian E-Filing Portal

Once the PAN is obtained, the French company needs to register and create a login on the Indian Income Tax e-filing portal. This login is used to file Form 10F, submit the ITR (if DTAA benefit is claimed), and respond to any notices.

5. DSC of the Authorised Foreign Signatory

A regular DSC of an Indian director or partner will not work. The Digital Signature Certificate must belong to the foreign authorised signatory of the French company. To obtain a DSC for a foreign individual, the following are required:

• Email OTP and phone OTP from the foreign individual
• Video verification of the foreign individual (live video call with the certifying authority)
• Address proof (e.g., driving licence, utility bill)
• Photograph
• Copy of a valid passport

6. No Permanent Establishment (No PE) Declaration

The French company must provide a declaration confirming that it does not have a Permanent Establishment (PE) in India within the meaning of the India-France DTAA. If a PE exists in India, royalty income attributable to that PE would be taxed as business income in India rather than at the treaty rate.

7. ITR Filing in India (Mandatory if DTAA Benefit is Claimed)

As mentioned, any foreign company that claims a DTAA benefit (including the lower royalty rate) is required to file an ITR in India. The ITR must be digitally signed using the DSC of the foreign authorised signatory registered on the portal.

Step-by-Step Process: How to Comply with Form 10F Requirements

1. Obtain TRC from French Tax Authorities: The French company applies for a TRC from the Direction Générale des Finances Publiques for the relevant assessment year.
2. Apply for PAN in India (Form 49AA): Submit the PAN application to NSDL/UTI with the required KYC documents of the French company and its authorised signatory.
3. Obtain DSC for the Foreign Authorised Signatory: Engage a licensed Certifying Authority (CA) in India to issue a Class 3 DSC for the foreign signatory, completing the video verification and document submission process.
4. Register on the Income Tax E-Filing Portal: Use the PAN and DSC to register the French company on the Indian Income Tax portal.
5. File Form 10F Online: Log in to the portal and file Form 10F for the relevant financial year, attaching the TRC details.
6. Issue No PE Declaration: Prepare and share a No PE declaration with the Indian payer company before the royalty payment is made.
7. Indian Payer Deducts TDS at 10%: Armed with TRC, Form 10F, and No PE Declaration, the Indian company deducts TDS at 10% instead of 20%.
8. File ITR in India: After the financial year ends, file the ITR in India disclosing the royalty income and TDS credit.

TDS Rates for Royalty Payments to France: Individuals vs. Others

Under Section 195 of the Income Tax Act, the Indian payer is responsible for deducting TDS on royalty payments made to non-residents. The applicable rates are:

Category	TDS Rate (Section 115A – No DTAA)	TDS Rate (India-France DTAA – With Form 10F + TRC)
Individual (French resident – natural person)	20% + applicable surcharge + 4% cess	10% (flat, on gross royalty)
Other than Individual (French company, LLP, etc.)	20% + 2% surcharge (if income > ₹1 Cr) + 4% cess	10% (flat, on gross royalty)

Note: Surcharge rates are subject to change as per the Finance Act for the relevant assessment year. Always confirm the current applicable surcharge with a tax professional before making the payment.

What Happens if Form 10F is Not Filed?

Failure to comply with Form 10F and related requirements has serious consequences for both the French company and the Indian payer:

• The Indian payer cannot apply the lower DTAA rate of 10% and must deduct TDS at the higher domestic rate of 20% (plus surcharge and cess).
• The French company may face difficulties claiming a refund of excess TDS in India without a valid ITR and portal registration.
• The Indian payer may be treated as an assessee-in-default under Section 201 of the Income Tax Act for short deduction of TDS if DTAA benefits are claimed without valid documentation.
• Interest under Sections 201(1A) and penalties under Section 271C may be levied on the Indian payer.

How Taxocity Helps with India-France DTAA Compliance

Taxocity has been providing end-to-end tax and compliance services since 1975, with a 4.8/5 rating from over 5,000 clients. Our DTAA specialists handle the complete Form 10F compliance process for French companies receiving royalty income from India, including:

• PAN application (Form 49AA) for the French entity
• DSC procurement for the foreign authorised signatory, including coordination of video verification
• Income Tax portal registration and login setup for the French company
• Online filing of Form 10F and TRC submission
• Drafting the No PE Declaration in line with India-France DTAA requirements
• ITR filing in India for the French company (mandatory when claiming DTAA benefit)
• Advisory to the Indian payer on correct TDS deduction under Section 195

Our team of real human experts ensures 100% compliance at every step, from initial registration through annual ITR filing. You do not need to navigate complex Indian tax regulations alone.

Key Takeaways

1. Form 10F is mandatory for any French company claiming the 10% reduced rate on royalties under the India-France DTAA.
2. A valid TRC from French tax authorities must accompany Form 10F at all times.
3. The French company must obtain a PAN, register on the Indian Income Tax portal, and hold a DSC of the foreign authorised signatory.
4. A No PE Declaration is required by the Indian payer before applying the DTAA rate.
5. Claiming DTAA benefit triggers an obligation to file an ITR in India.
6. Without Form 10F + TRC, TDS is deducted at 20% (plus surcharge and cess) under Section 115A.
7. The DSC must belong to the foreign signatory; a domestic director's DSC is not acceptable.

Related Services by Taxocity

• GST Registration - For businesses operating in India
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Sources

• Income Tax India – E-Filing Portal: https://www.incometax.gov.in
• CBDT – Double Taxation Avoidance Agreements: https://www.incometaxindia.gov.in
• Ministry of Corporate Affairs – DSC Information: https://www.mca.gov.in

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Disclaimer: The information provided in this article is for general informational purposes only and does not constitute tax advice, legal advice, or professional consultation. Tax laws and treaty provisions are subject to change, and their application may vary based on individual facts and circumstances. Please consult a qualified tax advisor or DTAA specialist before making any decisions regarding royalty payments, withholding tax, or DTAA compliance. Taxocity is not liable for any decisions taken based on this article.