India Issues New Permanent Account Number (PAN) Application Form 49AA For Foreign Residents/Entities
The Income Tax Department of India recently issued a new PAN (Permanent Account
Number) application form (Form No. 49AA) for foreign residents/entities.
Foreign companies involved in business transactions in India need to apply for
a PAN to avoid a higher withholding tax that is applicable to non-PAN holders. An
Indian payer has to deduct tax at the rate of 20% or the applicable rate, whichever
is higher, from payments made to a non-PAN holder payee.
The higher withholding tax rate applies to a foreign payee even if such payee does
not have any entity, employee or presence in India.
The new application form, effective from November 1, 2011, applies to:
- Companies registered outside India;
- Individuals not being citizens of India;
- LLPs registered outside India;
- Firms or Association of persons(Trusts or otherwise) formed or registered outside
India;
- Other specified entities registered outside India.
Any person or organization receiving any form of payment from India is required
to have a PAN to avoid higher tax deduction. It is important to note that a non-resident payee cannot obtain a non-deduction of withholding tax certificate without quoting the PAN.
Please call/email for more details.
Disclaimer :
Published: November 04, 2011. The details provided above are purely on an informational
basis. It is not comprehensive nor does it provide legal advice. Nair & Co. is not
responsible for any action taken or failure to take any action in reliance on the
above. Please note that this calendar is not intended to be all-inclusive and covers
only major deadlines, not all deadlines. Any information is subject to change without
notice.
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