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Taxman's demand for PAN details of key people puts FPIs in a spot

Taxman's demand for PAN details of key people puts FPIs in a spot

A new rule by Indian tax authorities this year is posing a hurdle to leading foreign investors including sovereign funds and pension funds investing in the country.

The tax department has made it mandatory for all non-individual tax filers to mention the PAN number of authorised signatories in the income tax returns along with their signature. Tax experts advising overseas funds said this requirement is impacting the foreign portfolio investors (FPIs) structured as non-corporate trusts and association of persons (AOPs) the most.

Trustees and partners of overseas funds, who are foreign nationals, are reluctant to obtain a PAN card since it would make them an Indian taxpayer, they said. There are also data privacy concerns since these foreign nationals would have to provide their personal documents as a part of the Know Your Customer (KYC) requirements.

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