Volume 5, Issue 4

17th April, 2012

Tax Alert
New PAN application forms are operative w.e.f. 08.04.2012

The Central Board of Direct Taxes had issued Notification dated 17th October, 2011, pertaining to application for the allotment of a Permanent Account Number (PAN) in revised Forms 49A for Indian citizens and new 49AA for foreign citizens/entities. However, in practice, the said changes were not yet operative. However, recently, the said two forms have been made operational w.e.f. 8th April, 2012. Certain guidelines have also been laid down to provide for steps for making the application, details of mode of payment and other instructions such as mode of submissions of documents and instructions for filing of these forms etc.

Thus, with effect from 8th April, 2012, Indian citizens, Indian companies/firms/LLPs/Trusts will have to submit their application for allotment of PAN in revised Form 49A only. Similarly, foreign citizens, foreign companies/firms/LLPs/Trusts etc will have to submit their application for allotment of PAN in Form 49AA only. In our earlier alert (Vol 4 Issue 8 dated 3rd November, 2011) we had made a detailed comparison of both these forms and additional requirements to be included in the new form 49AA in case of foreign citizens. It may be noted that those persons or entities who have already got a valid PAN allotted to them need not apply again for the PAN. The new forms are applicable only for those applicants who had never applied for a PAN or who do not have PAN allotted to them earlier by the Income Tax Department.

Some important points that may be noted with reference to the two forms are:

  • Earlier while making application for PAN in case of Individual and Hindu Undivided Family applicants, only one address proof was required to be submitted. However now, if the applicant gives communication address as office address then in such cases the proof for office address as well as proof for residential address is required to be submitted.
  • Hitherto, the filing fees for the PAN application forms could be paid in cash. Now no cash transactions will be allowed for making payment towards application for PAN in physical form. The same can be done only by Demand draft / cheque or credit/debit cards. And in case of applicants who provide only a foreign address, the payment will be accepted only by way of Demand Draft payable at Mumbai.
  • As per RBI guidelines, an applicant making electronic payment is required to provide Personal Identification Number while executing an online transaction. Accordingly before making payment for online PAN / TAN applications using debit/credit card, the applicant must ensure that the PIN is obtained from the respective bank.
  • The filing fees for applicants having communication address in India would be Rs. 96 while those having a foreign communication address would need to pay Rs. 962.
  • In case of applicants providing a foreign address, the PAN card would be couriered to the said foreign address. However, this facility is extended only to selected countries. At present, this list contains 105 countries including Australia, China, France, Germany, Japan, Mauritius, Singapore, UAE, UK and USA. The entire list is available at the following URL: https://tin.tin.nsdl.com/pan/Country.html
  • There is a facility to make online applications. This facility also provides the applicant with an option to make online payment using a credit/debit card. While doing this, the guidelines require that the payment can be made only by restricted persons. The details are given below:

Persons authorized to make Credit card / Debit card / Net banking payment are as below:

Category of Applicant Payment by Credit Card / Debit Card / Net Banking can be made by / for
Individual Self, immediate family members (parents, spouse, children)
HUF Karta of the HUF
Company Any Director of the Company
Firm / Limited Liability Partnership Any Partner of the Firm / Limited Liability Partnership
Association of Person(s) / Body of Individuals / Association of Person(s) Trust / Artificial Juridical Person / Local Authority Authorized Signatory covered under section 140 of Income Tax Act, 1961

  • It may be further noted that even if an online application is made, the applicant is still required to furnish certain documents physically. These are to be sent to NSDL at Income Tax PAN Services Unit, National Securities Depository Limited, 3rd floor, Sapphire Chambers, Near Baner Telephone Exchange, Baner, Pune – 411045.
  • The new Form 49AA also doubles up as a KYC form for Qualified Foreign Investors (QFI) which is a newly recognised class of investors who are now allowed to invest in Indian mutual funds, equities and debt.
  • The detailed guidelines for filling in Form 49AA are available at the following URL: https://tin.tin.nsdl.com/pan/form49AA.html

SKP comments:

The old forms are now no more applicable and due care should be taken before making application for PAN in the new forms especially in case of foreign citizens and foreign entities such as FIIs and QFIs as additional KYC details are required to be furnished in the Form 49AA. It would be advisable to factor in a time gap of at least 3 weeks between the date of application for PAN and date of allotment of the PAN. It is pertinent to note that without a PAN, it is not possible to open a bank account / demat account / stock broking account etc in India. Therefore, foreigners/foreign entities planning to invest in India may keep this time frame in consideration while planning their entry strategy into India.