TaxFinancial Glossary
TRC (Tax Residency Certificate)
Definition
A certificate issued by the tax authority of your country of residence confirming your tax residency status. NRIs need a TRC to claim benefits under the DTAA (Double Taxation Avoidance Agreement) between India and their country of residence. Without a valid TRC, Indian tax authorities may deny treaty benefits.
Why It Matters
A TRC is mandatory for claiming reduced TDS rates or treaty exemptions on Indian income. For example, an NRI in the UAE (which has no income tax) needs a TRC from UAE authorities to claim treaty benefits on Indian capital gains. Obtaining a TRC typically requires proving physical presence and tax filing status in the foreign country.