Finance Minister P Chidambaram has removed a clause from the act on Personal Income Tax. The clause stated that tax residency certificates, TRCs were necessary, but not sufficient to obtain benefits under double-taxation avoidance agreements (DTAAs) India has with other nations, including Mauritius. TRCs may now be sufficient to get treaty benefits. The foreign investor, however, will be required to provide any other documents sought by the income-tax department.

Chidambaram told this to reporters outside Parliament yesterday. He clarified that tax residency certificate issued by a foreign government will be accepted as a proof of residence, but additional information may also be required .

TRCs are issued by foreign governments to investors as a proof of residency seeking to avail benefits under DTAAs.