The Securities and Exchange Board of India (SEBI) has announced significant relaxations in the Permanent Account Number (PAN) onboarding process for Foreign Portfolio Investors (FPIs). These measures come in response to difficulties FPIs faced in complying with newly notified Income-tax Rules, 2026, which were issued by the Central Board of Direct Taxes (CBDT).
The CBDT's revised Income-tax Rules, published on March 20, 2026, introduced several new mandatory fields in the PAN application forms. These included requirements for a Taxpayer Identification Number (TIN) and detailed information about the Representative Assessee (RA) or Authorised Representative (AR). Additionally, certain fields that were previously optional, such as mobile numbers, became compulsory, leading to apprehension among FPIs regarding potential operational hurdles.
Addressing FPI Concerns Over New PAN Rules
Following a wave of concerns from various stakeholders within the financial sector, SEBI actively engaged with the CBDT. The objective was to ensure that the process of obtaining a PAN remained straightforward and efficient for foreign investors, crucial for capital market participation.
As a result of these discussions, the CBDT issued several key clarifications aimed at easing the compliance burden for FPIs:
- Authorised Signatory Details: The name of the Authorised Signatory (AS) already captured in the Common Application Form (CAF) will now suffice for the RA/AR field. This eliminates the need for any additional supporting documents related to the AS, RA, or AR.
- Contact Information Flexibility: FPIs are permitted to provide the address, contact number, and email details of the AS. If these details are not available, the corresponding information for the FPI itself can be submitted instead.
- Identification Alternatives: In instances where the PAN, Aadhaar, or passport details of the AS are unavailable, FPIs can furnish their registration number as an alternative identifier.
- TIN Field Clarification: For jurisdictions where a Taxpayer Identification Number (TIN) is not applicable, applicants can simply fill the relevant field with “0000000000”.
- Landline Option: The CBDT has also allowed FPIs to provide a landline number in cases where a mobile number is not available.
SEBI emphasized that these clarifications are designed to ensure continued ease of onboarding for FPIs. The existing mechanism allows FPIs to utilize a single Common Application Form for various essential processes, including SEBI registration, opening bank and demat accounts, and PAN issuance, thereby streamlining their entry into the Indian financial markets.