on Thursday issued a set of clarifications issued by the Central Board of Direct Taxes (CBDT) to address difficulties faced by foreign portfolio investors (FPIs) in obtaining Permanent Account Numbers (PAN) under the revised onboarding framework.
The move comes after delays in PAN issuance disrupted onboarding of new FPIs over the past month following changes to the common application form (CAF) and PAN application process.
The CAF serves as a single-window system for FPI registration, PAN allotment, and opening of bank and demat accounts.
As part of the revised framework introduced from April 1, new PAN forms notified by CBDT required additional disclosures, including details and documents relating to representative assessees (RA) or authorised representatives (AR), along with mandatory fields such as mobile numbers.
The changes had triggered operational hurdles for FPIs and intermediaries, with market participants flagging concerns over potential tax liability for custodians, banks and brokers acting on behalf of offshore funds. At least 20 newly registered FPIs were understood to be awaiting PAN allotment due to the bottleneck.
“In view of several difficulties expressed by concerned stakeholders in furnishing such information by FPIs, SEBI actively engaged with CBDT to facilitate continued ease of allotment of PAN to FPIs,” the regulator said in a press release.
Following consultations between SEBI and CBDT, the tax department has now clarified that the name of the authorised signatory (AS) captured in the CAF would suffice for the RA/AR field in PAN applications. The liability of the AS would be limited solely to the purpose of applying for PAN and no supporting documents for the AS, RA or AR would be required.
CBDT has also relaxed other requirements to ease onboarding. If address, mobile number or email details of the authorised signatory are unavailable, corresponding details of the FPI can be provided instead.
Similarly, if PAN, Aadhaar or passport details of the authorised signatory are unavailable, the FPI registration number may be submitted.
The tax department further clarified that where Taxpayer Identification Number (TIN) or its equivalent is not applicable in a jurisdiction, applicants can fill the field with a default “0000000000” value.
In cases where the FPI’s mobile number is unavailable, a landline number may be furnished instead.
SEBI said the measures were aimed at ensuring continued ease of onboarding for foreign investors.