PAN Allotment in India: Compliance Requirements for Foreign Companies, NRIs, and FPIs

Foreign investors applying for a PAN in India must navigate the revised compliance framework under the Income-tax Act, 2025, and Income-tax Rules, 2026. Learn how the latest relaxations benefit FPIs and what foreign companies and NRIs need to do to ensure a compliant PAN application.

The implementation of the Income-tax Act, 2025, and the Income-tax Rules, 2026, from April 1, 2026, introduced a new PAN registration framework for foreign individuals and entities. The revised rules replaced the previous PAN application process while expanding disclosure and documentation requirements for non-resident applicants.

The Central Board of Direct Taxes (CBDT), in consultation with the Securities and Exchange Board of India (SEBI), issued a press release on May 15, 2026, providing targeted compliance relaxations for foreign portfolio investors (FPIs). These measures are intended to preserve the efficiency of India’s capital markets by ensuring that the revised PAN framework does not disrupt FPI onboarding or investment activity.

The relaxations, however, are limited to FPIs. Other foreign companies and non-resident individuals continue to be subject to the enhanced compliance requirements introduced under the new law.

Increased disclosure requirements for FPIs

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Under the revised PAN application framework, foreign applicants filing Form 95 or Form 96 under the Income-tax Rules, 2026, are generally required to submit more detailed identity and verification information than under the previous regime.

Source: FAQs and Guidance Notes on Forms as per Income-tax Rules, 2026

Key additional requirements include the following:

1. Providing a Taxpayer Identification Number (TIN) issued by the applicant’s country of residence or incorporation
2. Appointing an Authorized Representative (AR) or Representative Assessee (RA) in India
3. Furnishing supporting documentation relating to the appointed representative
4. Completing verification requirements through the AR or RA

Obtaining PAN is often a prerequisite for undertaking taxable transactions and meeting regulatory obligations in India.

Business advisory

Foreign businesses planning investments or commercial activities in India should review the revised PAN documentation requirements well before commencing transactions. Identifying an appropriate AR, gathering tax residency documentation, and verifying TIN information early can help avoid delays during incorporation, investment, or tax registration.

PAN registration requirements eased for FPIs

India’s direct tax authority has introduced several relaxations exclusively for FPIs through its May 15, 2026, clarification. The objective is to allow FPIs to continue using their existing onboarding framework without major procedural changes.

Existing authorized signatory valid for PAN

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It must be noted that FPIs are no longer required to appoint a separate AR or RA solely for PAN registration.

Instead, they may designate the authorized signatory already identified in the Common Application Form (CAF) in the AR/RA section of the PAN application.

Additionally, existing FPIs do not need to modify their governance or onboarding structures solely to comply with the revised PAN rules. Investment managers should nevertheless ensure that the authorized signatory information recorded in the CAF remains current and consistent with PAN application records.

No additional documentation required for FPIs

Tax authorities have clarified that the authorized signatory’s responsibility is limited exclusively to the PAN application process. Accordingly, FPIs are not required to submit separate supporting documents for the authorized signatory or AR/RA. 

This relaxation minimizes duplication of documentation already submitted during FPI registration, reducing administrative effort and accelerating PAN processing.

Alternative identification permitted

Where the authorized signatory does not possess an Indian PAN, Aadhaar, passport details, or contact information, FPIs may instead provide their FPI registration number or official FPI contact details.

Global asset managers operating through centralized compliance teams can continue using institutional identification details where personal identifiers are unavailable, reducing documentation challenges across jurisdictions.

TIN requirement relaxed

Certain jurisdictions do not issue a TIN or an equivalent identifier.

In such cases, FPIs may populate the TIN field with “0000000000,” eliminating the need to obtain documentation that does not exist in their home jurisdiction.

Why the PAN relaxations matter to FPIs

CBDT’s clarifications ensure that the revised PAN framework does not disrupt foreign portfolio investment into India.

The relaxations help in the following ways:

• Preserve existing FPI onboarding procedures
• Reduce documentation and compliance costs
• Eliminate unnecessary procedural duplication
• Ensure investors from jurisdictions without TIN systems are not disadvantaged.

Business advisory

Existing FPIs should review their PAN application processes to ensure they incorporate the latest CBDT clarifications. Investment custodians, designated depository participants (DDPs), and compliance teams should also update their onboarding checklists to reflect the revised requirements.

Mandatory PAN compliances for other foreign entities, NRIs 

These compliance relaxations are limited to foreign portfolio investors.

Foreign companies, overseas businesses establishing operations in India, non-resident individuals (NRIs), and other foreign entities applying under Form 95 or Form 96 must comply with the complete set of enhanced disclosure requirements.

Applicants are required to do the following:

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1. Disclose whether they are a foreigner, Person of Indian Origin (PIO), or Overseas Citizen of India (OCI)
2. Furnish a valid TIN issued by their home jurisdiction
3. Appoint an AR or RA
4. Submit supporting documentation relating to the representative
5. Ensure the representative has an Indian address and signs the verification declaration
6. Recognize that the AR or RA may assume responsibility for false declarations submitted in the PAN application

Unlike FPIs, these applicants cannot substitute the TIN requirement with the placeholder value “0000000000.”

Business advisory 

Foreign companies establishing subsidiaries, liaison offices, branch offices, or making direct investments in India should factor the expanded PAN compliance requirements into their market-entry timelines. Businesses should also carefully evaluate the legal responsibilities associated with appointing an AR or RA and consider contractual protections where appropriate.

ALSO READ: Foreign Investor Alert: India’s SAT Reaffirms Separate Pursuit of Tax Refunds in SEBI Disgorgement Cases

A well-executed audit in India is crucial to ensure compliance with local regulations, verify financial accuracy, and identify risks, while a clean, structured audit process helps businesses stay ahead and gain clear visibility into operations.

Lalitha Rao

Manager

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