Every Form W-8BEN signed during 2023 stops being valid on 31 December 2026. The IRS keeps the form in force until the end of the third calendar year after signing. Clients in India who signed in 2023 therefore need a new one if they still receive US income, and many will ask whether they also need a tax residency certificate. The question has a new layer this year, because the Indian certificate has carried new form numbers since the Income-tax Rules, 2026 took effect on 1 April 2026.
For a resident Indian client, the treaty claim on US income is made on the W-8BEN, not on a certificate. The certificate is supporting evidence of residence. A US payer generally needs it only when its own records point away from India or when the client's residence is genuinely in doubt. An advisor who knows those cases can tell most clients the form is enough, and prepare the certificate early for the few who need it. The guide to US commercial real estate for advisors explains how Indian clients hold these investments and which US forms follow.
What the W-8BEN treaty claim does
Form W-8BEN is a short US form in which a foreign individual certifies that they are not a US person. It goes to the payer that asks for it, never to the IRS. Part II carries the claim to treaty benefits, and on line 9 the client names India as the country of residence. The IRS instructions for Form W-8BEN say a person is resident in a treaty country if they are resident there "under the terms of the treaty".
Line 6a asks for the tax identifying number issued by the country of residence, which for an Indian resident is the PAN. The claim also depends on a treaty existing. India appears on the IRS list of US income tax treaties, while the UAE and Singapore do not, so a client who moves to either loses the claim whatever certificate they hold.
A change in circumstances that makes the form incorrect ends its validity early, and the client must tell the payer within 30 days. A move abroad or a new foreign address are the usual examples. The rate the treaty sets for dividends is a separate question, covered in the guide to US real estate tax for Indian investors.
When a US payer asks for a tax residency certificate
US withholding rules let a payer rely on a treaty claim unless it knows, or has reason to know, that the claim is unreliable. Treasury Regulation section 1.1441-7 lists the warning signs. A permanent residence address outside India is one. A mailing address outside India is another. A standing instruction to pay into an account outside India is a third.
Each can arise for an Indian client. A client may give a Dubai mailing address used for work, or ask for distributions to reach a foreign currency account opened abroad under the Liberalised Remittance Scheme. The payer can still accept the claim if it receives a reasonable written explanation or documentary evidence of residence in India. Under section 1.1471-3, that evidence includes a certificate of residence from the tax authority of the country claimed. It must show that the person filed their most recent return as a resident. In India the matching document is the certificate of residence under section 159 of the Income-tax Act, 2025, and each payer decides whether its wording meets its own procedures.
The harder case is a client whose residence is unclear. A client who returned to India recently, or who spends long periods abroad, may be resident in India under the Act and resident elsewhere under another country's law. A certificate does not settle that question. The CA should work out residence under the Act and the relevant treaty before a new W-8BEN names a country.
How a tax residency certificate is issued in India now
The department's e-filing portal now lists the application as "Form 10FA / Form 42". The Form 42 user manual ties it to sections 159(1) and 159(2) of the Income-tax Act, 2025. A resident applies in Form 42 to the Assessing Officer, who issues the certificate in Form 43 if satisfied. The declaration that non-residents once filed as Form 10F appears on the same portal as Form 41.
The process runs online for any registered e-filing user with an active PAN. The client chooses Form 42 under the Income-tax Act, 2025 tab, selects the tax year and gives an address for the year the certificate is wanted. Supporting documents are attached, and the form is verified by OTP, EVC or digital signature. The acknowledgement, and later the status, appear under View Filed Forms.
Two practical points come from commentary rather than the manual. Writing on TaxGuru on 24 August 2026, Dr Suhas Kulkarni, a retired Additional Commissioner of Income Tax, noted that Form 42 has no due date. He also noted that each certificate covers a single tax year, so a period running across two tax years needs two applications. A certificate for tax year 2026-27 can therefore cover no more than 1 April 2026 to 31 March 2027.
That tax year does not match the US calendar. A distribution paid in February 2027 falls in tax year 2026-27 in India but in calendar 2027 for the US payer. Section 1.1471-3 treats documentary evidence as generally valid until the end of the third calendar year after the payer receives it, unless the payer learns of a change that makes it incorrect.
What advisors should do before the year ends
The first step is a list of every client with US income and the date each W-8BEN was signed, because forms signed in 2023 need replacing before 31 December 2026. The second is to compare each client's addresses and payment instructions with what the payer holds. Where anything points outside India, the advisor should prepare the written explanation or the Form 42 application now, before the payer raises a query. The third is to settle residence with the CA for any client whose position is changing. The client file should record which clients needed a certificate and why.
The treaty claim changes the rate at which US tax is withheld, not the risks of the investment. Clients can still lose capital, property values can fall, distributions may not be paid, the interest is illiquid and rupee movements change its value.
Raveum offers eligible clients US real estate. Indian clients invest through a US corporation, a blocker, that holds the property interest, and they typically receive Form 1042-S. Raveum handles KYC, agreements and US tax forms, while the client's Indian tax position stays with the client and their CA. Advisors can see how introductions work on Raveum's partner page. The explainer on the Form 1042-S foreign tax credit covers how the US tax shown on that form is credited in India.
The renewal of a W-8BEN looks like routine paperwork, but it is also the moment to test the facts behind the treaty claim. For most resident Indian clients the form alone carries the claim. For clients with foreign addresses, foreign accounts or uncertain residence, the tax residency certificate is what keeps the claim credible to the payer. The guide to US commercial real estate for advisors sets out the wider structure in which these forms sit.
Frequently Asked Questions
What is a tax residency certificate in India?
A tax residency certificate is a certificate of residence issued by the Assessing Officer to show that a person is resident in India for a tax year. Under the Income-tax Act, 2025 and the Income-tax Rules, 2026, the application is made in Form 42 and the certificate is issued in Form 43, for use in treaty claims.
How to apply for a tax residency certificate in India?
The applicant files Form 42 on the income tax e-filing portal after logging in with an active PAN. The form asks for the tax year and an address for that year, accepts supporting documents and is verified by OTP, EVC or digital signature. The Assessing Officer reviews it and, if satisfied, issues the certificate in Form 43.
What is the new form number for Form 10FA?
Form 10FA, the application for a tax residency certificate, is Form 42 under the Income-tax Rules, 2026, in force from 1 April 2026. The department's e-filing portal lists it as Form 10FA / Form 42. The certificate itself is issued in Form 43, and the non-resident's declaration once filed as Form 10F is now Form 41.
Does an Indian resident need a tax residency certificate for US treaty benefits?
Usually not. A resident Indian claims treaty benefits on US income through Part II of Form W-8BEN, naming India and giving the PAN. A US payer may ask for a certificate when its records show an address or payment account outside India, because US rules then call for an explanation or evidence of residence.
How long is a tax residency certificate valid?
An Indian certificate covers a period within one tax year, so a client needs a fresh application for each tax year. On the US side, documentary evidence given to a payer is generally treated as valid until the last day of the third calendar year after it is provided, unless a change in circumstances makes it incorrect.
What risks remain once a client's treaty claim is accepted?
The treaty claim only sets the rate at which US tax is withheld. It does not protect the investment. A private US real estate interest can lose value, may pay no distributions, is hard to sell before exit and is exposed to rupee movements. The claim itself can also lapse if the client's residence or addresses change.
This article is for general education and is not tax, legal or investment advice. Rules change and depend on individual circumstances. All investing involves risk, including loss of capital, illiquidity and currency movements. Offerings on Raveum are available to eligible investors only and are not open to the general public.
