FORM 41 UNDER INCOME TAX ACT, 2025

1. Introduction

The Income Tax Act, 2025 ('New Act'), which came into force on 1st April 2026, has replaced the long-standing Income Tax Act, 1961. Along with this overhaul, the Government of India has introduced several new forms and updated compliance requirements for non-resident taxpayers. One of the most significant changes in the realm of international taxation is the introduction of Form 41, which replaces the erstwhile Form 10F.

Form 41 is a prescribed form under Section 159(8) of the Income Tax Act, 2025, read with Rule 75 of the Income Tax Rules, 2026. It is designed to enable non-resident taxpayers to furnish information required to claim benefits under a Double Taxation Avoidance Agreement (DTAA) between India and their country of residence.

Key Highlight — Transition Note
For income received up to 31st March 2026 (i.e., Assessment Year 2026-27 under the old Act), Form 10F under the Income Tax Act, 1961 continues to apply. Form 41 is applicable only for income received on or after 1st April 2026 (Tax Year 2026-27 onwards under the new Act).

2. What is Form 41?

Form 41 is a self-declaration form filed by non-resident taxpayers to provide information prescribed under Section 159(8) of the Income Tax Act, 2025, in order to claim benefits under an applicable DTAA. It acts as a supplementary document to the Tax Residency Certificate (TRC) and serves to establish the non-resident's eligibility for treaty relief.

In essence, Form 41 is a digitized, more comprehensive, and documentation-driven successor to Form 10F. The purpose remains the same to avoid double taxation on the same income earned in India but the compliance framework has been significantly strengthened to align with global anti-abuse standards and India's push toward digital transparency.

3. Legal Framework

3.1 Section 159 of the Income Tax Act, 2025

Section 159 of the Income Tax Act, 2025 governs India's treaty framework, enabling the Central Government to enter into Double Taxation Avoidance Agreements (DTAAs) with foreign countries or specified territories. A key principle under the new law is that taxpayers can apply treaty provisions where they are more beneficial than domestic law.

Section 159(8) specifically creates a documentation-driven entitlement to DTAA relief. A non-resident can claim treaty benefits on income from India only if both of the following conditions are simultaneously fulfilled:

• Condition 1 -Tax Residency Certificate (TRC): A certificate issued by the tax authority of the taxpayer's country of residence, confirming tax residency for the relevant year.
• Condition 2 - Prescribed Information (Form 41): Additional information and documentation as prescribed under Rule 75 of the Income Tax Rules, 2026, provided through Form 41.

Without both documents being furnished, DTAA benefits can be denied at the withholding stage itself - making compliance absolutely critical.

3.2 Rule 75 of the Income Tax Rules, 2026

Rule 75 of the Income Tax Rules, 2026 provides the operational framework for implementing Section 159(8). It outlines the documentation and procedural requirements for claiming DTAA relief and mandates that prescribed information must be furnished through Form 41. This rule is the equivalent of Rule 21AB under the old Act of 1961.

4. Who Should File Form 41?

Form 41 must be filed by the following categories of taxpayers:

• Non-resident individuals, foreign companies, or other non-resident entities receiving income from India and seeking to avail DTAA benefits.
• Non-residents who do not have a Permanent Account Number (PAN) in India or who are not required to file an Income Tax Return (ITR) in India, but whose payments are subject to TDS and who wish to avail lower or nil withholding tax rates under the applicable DTAA.
• Non-residents earning dividend income, interest income, royalties, fees for technical services (FTS), capital gains, or any other income from India that is covered under an applicable DTAA.

It is important to note that all non-resident registered users on the e-Filing portal whether they hold a PAN or log in via NR ID — can file Form 41.

5. Structure of Form 41

Form 41 has four parts, designed to capture comprehensive information about the non-resident taxpayer and their eligibility for DTAA benefits:

6. Documents Required Along with Form 41

The following documents are mandatorily required to be attached or available at the time of filing Form 41:

• Tax Residency Certificate (TRC): Issued by the tax authority of the taxpayer's country of residence. Must be valid for the relevant financial year in India. This is the most critical document.
• Taxpayer Identification Number (TIN): A valid TIN issued by the country of residence is mandatory. In absence of a TIN, a unique identification number used by the government of that country may be provided.
• No Permanent Establishment (PE) Certificate: Required where the non-resident is claiming treaty benefit on business profits or fees for technical services (FTS) / royalties on the basis of no Permanent Establishment in India.
• Beneficial Ownership Declaration: Required to establish that the non-resident is the beneficial owner of the income from India — a key anti-abuse requirement under the new Act.

Note: Form 41 does not require submission of any proof of tax payment in the country of residence. It only requires quoting of TIN and attaching a valid TRC.

7. How to File Form 41 - Step-by-Step Process

7.1 For Non-Residents Holding a PAN

1. Step 1: Log in to the Income Tax e-Filing portal (www.incometax.gov.in) using your PAN credentials.

2. Step 2: Navigate to the 'e-File' section and select 'Income Tax Forms'.

3. Step 3: Under the 'Forms as per Income Tax Act 2025' tab, search for 'Form 41' and click the 'File Now' button.

4. Step 4: Select the applicable Tax Year (T.Y.) and click 'Continue'.

5. Step 5: The portal will direct you to the Panel screen. Complete Part A (Particulars of Applicant) — confirm details and click Save.

6. Step 6: Complete Part B (Residential Information) -fill in all required details and click Save.

7. Step 7: Complete Part C (Income and DTAA Details) as applicable.

8. Step 8: Complete Part D (Declaration and Verification) review all entries carefully.

9. Step 9: Preview the form and verify using DSC (Digital Signature Certificate) or EVC (Electronic Verification Code).

10. Step 10: On successful e-Verification, a success message is displayed along with a Transaction ID and Acknowledgement Receipt Number. Preserve these for future reference.

7.2 For Non-Residents without a PAN (NR ID Login)

Non-residents who do not hold a PAN can register on the Income Tax e-Filing portal under the 'Non-Residents not holding PAN' option in the 'Others' tab. Verification for such users is done via OTP sent to the registered email and mobile number.

Important: No Offline Filing Allowed
Form 41 can only be submitted online through the Income Tax e-Filing portal. Offline or physical filing of Form 41 is not acceptable. Additionally, once Form 41 is submitted and an acknowledgement is generated, it cannot be edited. Therefore, ensure all details are correct before submission.

8. Frequency and Due Dates for Filing

The Income Tax Act, 2025 does not prescribe a specific statutory deadline for Form 41. However, as a best practice and to avoid TDS at full domestic rates, it should be filed before payments are made or TDS is deducted.

9. Consequences of Non-Filing / Non-Compliance

The practical implications of failing to file Form 41 (along with TRC) are substantial:

• DTAA benefits are denied at the withholding stage the Indian payer must deduct TDS at the full domestic rate, which can be 20% or higher on most income categories.
• On a USD 500,000 payment for technical services from India, the difference between domestic TDS and the applicable DTAA rate can amount to USD 25,000 to USD 50,000 or more in excess TDS.
• Without Form 41 and a TRC, excess TDS must be recovered through the Indian income tax return process, which typically takes 12 to 24 months.
• DTAA claims may be disallowed during ITR processing, leading to additional tax demand and interest.
• Non-resident entity and the Indian payer could face scrutiny and compliance notices.

10. Form 10F vs. Form 41 - A Comparison

11. Conclusion

The introduction of Form 41 under the Income Tax Act, 2025 marks a significant step in India's ongoing transformation toward a more transparent, technology-driven, and globally aligned tax regime. While Form 41 is substantially similar in purpose to the erstwhile Form 10F, it represents a materially stronger compliance architecture — with mandatory digital filing, enhanced documentation requirements, beneficial ownership disclosures, and alignment with BEPS principles.

For non-resident taxpayers, timely filing of Form 41 along with a valid TRC is non-negotiable to access treaty benefits. For Indian payers, reliance on Form 41 provides a safe harbor against TDS shortfall liability. And for CA practitioners, this new form represents an important addition to the annual international tax compliance checklist.

Disclaimer
This article has been prepared for informational purposes only based on the provisions of the Income Tax Act, 2025 and Income Tax Rules, 2026. It does not constitute legal, tax, or professional advice. Non-residents and payers are strongly advised to consult their qualified Chartered Accountant or tax advisor before taking any action based on this article, as the facts and circumstances of each case may differ.