Claiming a treaty rate: the residency certificate, and Form 10F becoming Form 41

Short answer: a treaty rate is not applied automatically. The payer deducts at the rate the Act prescribes unless it holds a Tax Residency Certificate and the prescribed form before deduction. Under the Income-tax Act 2025, that form — Form 10F — is now Form 41, under Section 159(8) read with Rule 75 of the Income-tax Rules 2026.

The difference between doing this before and after is not entitlement. It is a year of your money.

Why the full rate is being deducted

The payer — your bank, your tenant, the company paying a dividend — is the one at risk if it deducts too little. It is required to withhold at the rate the Act sets, and it may apply a lower treaty rate only if it holds evidence that you are entitled to one.

No evidence, no lower rate. This is not the bank being difficult; it is the bank being unwilling to carry your tax exposure.

The two documents

The Tax Residency Certificate comes from the tax authority of your country of residence. India neither issues it nor accepts a substitute for it. In most jurisdictions obtaining one takes weeks, and that lead time is usually what decides whether relief happens at source or becomes a refund claim.

Form 41 — formerly Form 10F — supplies the particulars the TRC does not contain: status, nationality, tax identification number, period of residency, address. If your certificate already carries all of them, the form is not separately required. In practice many foreign certificates do not, so it usually is.

It is filed electronically on the portal. And the payer needs it too. Filing without telling the payer, or handing the payer a copy without filing, produce the same result as doing neither.

What changed under the 2025 Act

The substance did not move. The numbering did, and most guidance still uses the old references — so if you are working from an article or a bank's checklist, check which vocabulary it is written in before concluding that something is missing.

The case this matters most in

NRO interest. Interest credited on an NRO account is deducted at the non-resident rate, and a great many treaties provide a materially lower rate on interest.

Whether your bank applies it depends on one thing: whether it holds the TRC and the form before it credits the interest. Most NRIs discover the answer when the interest arrives net of the full rate — by which point the only route is a return and a refund.

The same logic applies to rent from an Indian property, dividends on Indian shares, and professional fees for work done in India.

If it has already been deducted

Nothing is lost. Treaty relief can be claimed in the return, and the excess deducted comes back as a refund.

What it costs is time. A deduction in June is money you get back after filing the following year, and possibly later still. For anyone repatriating, it also complicates the picture, because the funds sitting in India are larger than they should be and their tax history has to be explained — see when a repatriation actually needs a CA certificate.

What to do, in order

1. Establish whether a treaty covers the payment and what rate it provides for that category of income.
2. Apply for the TRC in your country of residence — first, because it is the long lead item.
3. Check whether the TRC carries every prescribed particular. If not, Form 41 is required.
4. File the form electronically, and give the payer both documents.
5. Confirm with the payer that they have applied the rate, before the next credit rather than after.

Step five is the one people skip, and it is why relief that was properly claimed still fails to arrive.

For the account-by-account position on what is being deducted where, see NRE, NRO and FCNR.

This is a working reference, not the statute. Treaty entitlement turns on the specific treaty with your country of residence and on the category of income — confirm both before relying on a rate.