www.pwc.com/in haring insights News Alert 4 vember, 2011 CBDT amends Rules relating to PAN application The Central Board of Direct Taxes ( CBDT ) has notified 1 Income-tax (7th Amendment) Rules, 2011 amending Rule 114 of the Income-tax Rules, 1962 ( the Rules ), effective from 1 vember, 2011. The rules provides for procedure for Permanent Account Number ( PAN ). alient features of amended rules are as under: eparate form prescribed for taxpayers registered outside Requirement for obtaining PAN to be determined based on 'Financial year' as against 'Accounting year' 1 tification.o.. 1497(E) dated 01 July, 2011 List of documents which could be submitted as identity/ proof along with application form have been amended Requirement of obtaining PAN has been made mandatory in cases where tax is deductible at source Know Your Client ( KYC ) norms made mandatory for foreign institutional investor or a qualified foreign investor New PAN application forms : To be used by n citizen, Hindu undivided families ( HUF ), companies, firm [including limited liability partnership ( LLP )], trust, association of persons ( AOP ), body of individuals ( BOI ), formed or 1
A: To be used by individuals not being a, LLP, companies, firm, trust, AOP, BOI, formed or registered outside proof of Identity/ proof coparceners on the date of application 1 Individual who is a and residing in 2 Individual who is a and residing outside proof of change in the documents as previously change in the documents as previously specified in Rule 114 of the Rules Evidence which could be submitted in addition to those mentioned in Rule 114 of the Rules Copy of bank account statement in country of residence; or Copy of n-resident External ( NRE ) bank account statement 4 Company 5 Firm [including LLP formed or ] 6 Association of persons (trusts) formed or change in the documents as previously 3 Hindu undivided family change in the documents as previously Additional requirements: Affidavit by karta of HUF stating name, father s name and of all the 7 Association of persons (other than trusts) or body of individuals or local authority 2
proof of proof of or artificial juridical person formed or registered in 8 Individuals, not being a A Identity proof (either of following) Copy of passport Copy of Person of n Origin card issued by the Government of Copy of overseas citizenship of card issued by Government of Copy of other national or citizenship identification number or taxpayer Address proof (either of following) Copy of bank account statement in the country of residence Copy of NRE bank account statement in Copy of certificate of residence in or residential permit issued by the state police authority Copy of the registration certificate issued by the Foreigner s Registration Office showing n Copy of visa granted and copy of appointment letter or contract from n company and 9 LLP registered outside 10 Company registered outside 11 Firm formed or registered A A identification number duly attested by Apostille (in respect of countries which are signatories to the Hague Apostille Convention of 1961) or by n embassy or High Commission or consulate in the country where the applicant is located certificate (in original) of n issued by the employer Identity and proof (either of following) Copy of certificate of registration issued in the country where the applicant is located, duly attested by Apostille (in respect of countries which are signatories to the Hague Apostille Convention of 1961) or by n embassy or High Commission or consulate in the country 3
proof of PAN to be obtained, based on income/sales/turnover/gross receipts exceeding specified monetary limits during 'financial year' outside 12 AOP (trust) formed outside 13 AOP (other than trust) or BOI or local authority or artificial juridical person formed or any other entity (by whatever name called) registered outside where the applicant is located Copy of registration certificate issued in or of approval granted to set up office in by n authorities A new category of person required to obtain a PAN has been added. Any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVII- B in any financial year, is required to make an application for obtaining PAN before the end of such financial year Know your customer (KYC) norms It is mandatory to provide KYC details in form A for Foreign Institutional Investors and Qualified Foreign Investors. The relevant regulations issued by ecurities and Exchange Board of ( EBI ) and Prevention of Money Laundering Act, 2002 may be referred for filling these details Our comments The interplay between Rule 114C(1)(b) of the Rules (non-residents not required to obtain PAN) and the newly amended Rule 114 of the Rules (adding a new category of person required to obtain PAN) needs to be analysed in greater detail. However, harmonizing the requirement to obtain PAN with fulfilment of KYC obligations is a welcome move. Requirement to obtain PAN Requirement for obtaining PAN would be determined based on 'financial year' as against 'accounting year' 4
Our Offices For private circulation only Ahmedabad President Plaza, 1st Floor Plot. 36, Opposite Muktidham Derasar Thaltej Cross Roads, G Highway Ahmedabad 380054 Phone: +91 79 3091 7000 Bangalore 7th Floor, Tower D The Millenia 1 & 2 Murphy Road, Ulsoor Bangalore 560 008 Phone: +91 80 4079 7000 Bhubaneswar IDCOL House, ardar Patel Bhawan Block III, Ground Floor, Unit 2 Bhubaneswar 751009 Phone +91-674-2532 459 / 2530 370 Chennai 32, Khader Nawaz Khan Road Nungambakkam Chennai 600 006 Phone: +91 44 4228 5000 Hyderabad # 8-2-293/82/A/113A Road.36, Jubilee Hills Hyderabad 500 034 Phone: +91 40 6624 6600 Kolkata outh City Pinnacle 4th Floor, Plot # X1/1 Block EP, ector 5, alt Lake Electronic Complex Kolkata 700 091 Phone: +91 33 4404 1111 Mumbai PwC House, Plot.18/A Gurunanak Road (tation Road) Bandra (West) Mumbai 400 050 Phone: +91 22 6689 1000 New Delhi / Gurgaon Building 10, 17th Floor Tower -C, DLF Cyber City Gurgaon 122002 Phone: +91 124 330 6000 Pune GF-02, Tower C Panchshil Tech Park Don Bosco chool Road Yerwada, Pune - 411 006 Phone: +91 20 4100 4444 For more information contact us at, pwctrs.knowledgemanagement@in.pwc.com The above information is a summary of recent developments and is not intended to be advice on any particular matter. PricewaterhouseCoopers expressly disclaims liability to any person in respect of anything done in reliance of the contents of these publications. Professional advice should be sought before taking action on any of the information contained in it. Without prior permission of PricewaterhouseCoopers, this Alert may not be quoted in whole or in part or otherwise referred to in any documents 2011 PricewaterhouseCoopers. All rights reserved. "PwC", a registered trademark, refers to PricewaterhouseCoopers Private Limited (a limited company in ) or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. 5