Description

SEBI, in coordination with CBDT, issues clarifications to ease PAN allotment for Foreign Portfolio Investors (FPIs) facing difficulties with new mandatory fields in updated PAN forms notified under Income-tax Rules, 2026.

Summary

SEBI has coordinated with the Central Board of Direct Taxes (CBDT) to resolve difficulties faced by Foreign Portfolio Investors (FPIs) in obtaining PAN under the newly notified Income-tax Rules, 2026. CBDT issued five specific clarifications to simplify the completion of updated PAN forms, reducing barriers to FPI on-boarding in Indian markets.

Key Points

  • CBDT notified new Income-tax Rules, 2026 and updated PAN forms on March 20, 2026, adding new mandatory fields (e.g., Taxpayer Identification Number, Representative Assessee/Authorized Representative details, mobile number)
  • FPIs expressed significant difficulties in furnishing the newly mandated information
  • SEBI actively engaged CBDT and secured five operational clarifications to ease compliance
  • The Authorized Signatory (AS) named in the Common Application Form (CAF) can serve as the Representative Assessee/Authorized Representative (RA/AR) for PAN purposes
  • No supporting documents are required for the AS/RA/AR fields
  • FPIs use a single Common Application Form (CAF) for SEBI registration, bank/demat account opening, and PAN issuance

Regulatory Changes

No new regulations were introduced. CBDT issued the following clarifications to the existing PAN application process under Income-tax Rules, 2026:

  1. The Authorized Signatory (AS) named in the CAF may be used for the RA/AR field; liability of the AS is limited solely to the purpose of PAN application
  2. AS’s address, mobile/landline number, and email ID may be used for RA/AR fields; if unavailable, FPI-level contact details may be substituted
  3. PAN, Aadhaar, or Passport of the AS may be furnished; if unavailable, the FPI registration number may be provided instead
  4. Where TIN or equivalent is not applicable for a jurisdiction, the TIN field may be filled with “0000000000”
  5. Where a mobile number is unavailable, a landline number may be provided in the contact details field

Compliance Requirements

  • FPIs applying for PAN under the new Income-tax Rules, 2026 forms should follow the above CBDT clarifications
  • Designated Depository Participants (DDPs) and custodians facilitating FPI registration should update their on-boarding processes to reflect these clarifications
  • No new documentation burden is imposed; existing CAF-captured Authorized Signatory information is sufficient for RA/AR fields

Important Dates

  • March 20, 2026: CBDT notified new Income-tax Rules, 2026 and updated PAN forms
  • May 15, 2026: SEBI press release (PR No. 30/2026) issued communicating CBDT clarifications

Impact Assessment

This circular has a moderate positive impact on foreign capital inflows into India. The clarifications remove procedural friction in FPI on-boarding that had arisen following CBDT’s revision of PAN forms in March 2026. By allowing substitution of FPI registration numbers for personal identifiers (PAN/Aadhaar/Passport) and permitting landline numbers in lieu of mobile numbers, the clarifications are particularly beneficial for institutional FPIs from jurisdictions where certain identifiers are not applicable. No market-wide or securities-specific impact is expected; the effect is limited to operational ease for new and renewing FPI registrations.

Impact Justification

Operational relief measure easing FPI on-boarding by clarifying PAN form requirements; important for foreign capital inflows but does not introduce new regulatory obligations or affect listed securities directly.