Tax Residency Certificate for Resident Assessees: A Complete Guide to Rule 75, Form 42 and Form 43

Overview

The Central Board of Direct Taxes (CBDT), under the Income Tax Department, has established a structured framework enabling resident assessees to obtain a Tax Residency Certificate (TRC). With the transition to the Income Tax Rules, 2026, this framework has been updated and reorganized, bringing greater clarity and digital accessibility to the process. Understanding these provisions is essential for any resident assessee seeking to claim benefits under a Double Taxation Avoidance Agreement (DTAA) or fulfilling tax residency documentation requirements imposed by foreign jurisdictions.

Rule 75 of the Income Tax Rules, 2026

Rule 75 of the Income Tax Rules, 2026 governs the documentation and information requirements applicable when a resident assessee applies for a Tax Residency Certificate. This rule is the successor provision to the erstwhile Rule 21AB of the Income Tax Rules, 1962, which served the same purpose under the older legislative framework.

The structural shift from the Income Tax Rules, 1962 to the Income Tax Rules, 2026 represents a legislative modernization effort, and Rule 75 carries forward the substantive requirements while aligning them with the current digital filing ecosystem maintained by the Income Tax Department.

Key Legal Note: Rule 75 of the Income Tax Rules, 2026 is the operative provision for resident assessees seeking a TRC. References to Rule 21AB of the Income Tax Rules, 1962 remain relevant only for historical or transitional context.

What is a Tax Residency Certificate (TRC)?

A Tax Residency Certificate is an official document issued by the Income Tax Department confirming that the holder is a tax resident of India for a specified period. It serves as formal proof of Indian tax residency and is primarily required in two scenarios:

  • Claiming DTAA benefits: When an Indian resident earns income from a country with which India has a DTAA, the foreign country may require proof of Indian tax residency before extending treaty benefits.
  • Foreign compliance requirements: Certain foreign jurisdictions mandate submission of a TRC as part of their domestic regulatory or tax compliance processes.

Without a valid TRC, resident assessees may face double taxation on cross-border income or be denied treaty-based relief, making timely and accurate filing of the TRC application critically important.

Form No. 42: Application for Tax Residency Certificate

What is Form 42?

Form No. 42 — the successor to the erstwhile Form No. 10FA — is the prescribed online application form through which a resident assessee formally requests a TRC from the Income Tax Department. The form is filed electronically on the Income Tax e-Filing portal, ensuring a seamless and paperless application process.

Who Should File Form 42?

Any assessee who: