JSA Prism | Direct Tax | June 2026

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Permanent Account Number relaxations for Foreign Portfolio Investors and enhanced requirements for non-resident individuals and companies

With the implementation of the Income-tax Act, 2025 and the Income-tax Rules, 2026 from April 1, 2026, the Permanent Account Number (“PAN”) framework has been substantially revised. While the new regime introduces enhanced compliance requirements for foreign individuals and entities, significant relaxations have been provided for Foreign Portfolio Investors (“FPIs”) to ensure operational continuity and ease of onboarding.

This article examines the specific relaxations available to FPIs and the contrasting requirements applicable to non-resident individuals and companies who do not qualify for these concessions.

Regulatory concerns for FPIs

Under the erstwhile Form 49AA, FPIs were required to furnish extensive know you customer information through the Common Application Form (“CAF”), including details relating to beneficial ownership, control, politically exposed person status and tax residency. Following the introduction of Forms No. 95 and 96, concerns were raised regarding the requirement to provide Taxpayer Identification Number (“TIN”) details and disclose an Authorised Representative (“AR”) or Representative Assessee (“RA”), together with the associated documentation and verification requirements.

Relaxations for FPIs

To address these concerns, the Securities Exchange Board of India, in consultation with Central Board of Direct Taxes (“CBDT”), issued Press Release[1]dated May 15, 2026 clarifying that, for FPIs, the authorised signatory identified in the CAF may be disclosed in the AR/RA field. The CBDT further clarified that the role and liability of such authorised signatory is limited solely to the PAN application process and that no separate supporting documentation is required in respect of the authorised signatory, AR or RA.

In addition, where PAN, Aadhaar, passport or contact details of the authorised signatory are unavailable, the relevant FPI registration number or FPI contact details may be furnished. The CBDT has also clarified that where a jurisdiction does not issue a TIN or equivalent identifier, the TIN field may be populated with the value ‘0000000000’.

These clarifications effectively alleviate the practical difficulties that FPIs would otherwise have faced in complying with the revised PAN application requirements and preserve the efficiency of the existing FPI onboarding process.

Position of non-resident individuals and companies

The relaxations discussed above appear to be specific to FPIs. At present, no corresponding clarification has been issued for other foreign individuals applying under Form No. 95 or foreign entities applying under Form No. 96. Consequently, such applicants must comply with the full scope of the enhanced requirements, including the following:

• mandatory disclosure of citizenship status, classified as: (a) foreigner; (b) person of Indian origin; or (c) overseas citizen of India;
• furnishing a TIN issued by their jurisdiction of residence or incorporation, without the benefit of the ‘0000000000’ relaxation available to FPIs;
• mandatory disclosure of AR or RA details with full supporting documentation;
• the AR/RA must have an Indian address and sign the verification declaration, confirming the accuracy and completeness of the information furnished; and
• personal liability assumed by the AR/RA for any false declaration in the PAN form.

Conclusion

The revised framework strikes a balance between easing compliance for certain categories of non-resident taxpayers and strengthening disclosure obligations for others.

For FPIs, the regulatory landscape remains favourable. The clarifications issued by CBDT mean that FPIs can continue to rely on their existing authorised signatory arrangements without additional documentation burdens, and the TIN exemption ensures that investors from jurisdictions without equivalent identifiers are not disadvantaged. The efficiency of the FPI onboarding framework has been preserved.

The position is markedly different for non-resident individuals and entities who do not hold FPI status. The non-resident individuals and entities without FPI status will need to navigate more detailed disclosure and verification requirements under Forms No. 95 and 96.

The changes also place greater responsibility on ARs and RAs. Tax authorities on behalf of the applicant may direct correspondence, notices and even proceedings to the AR/RAs. The AR/ RAs may seek contractual or indemnity protection in this regard.

For those considering an AR/RA appointment, careful attention should be given to documenting the scope of authority, ensure appropriate contractual protections and indemnities are in place, and establish arrangements for ongoing compliance support.

This Prism has been prepared by:

Kumarmanglam Vijay Partner and Head of Practice Direct Tax

Harshita Agrawal Associate

Maitri Gala Associate

For more details, please contact km@jsalaw.com

[1] Press release no. 30/2026