Recent changes in income tax rules have tightened the requirements for obtaining a Permanent Account Number (PAN) for non-resident individuals and foreign entities operating in India. The revised framework places greater emphasis on documentation and identification.
A key change under the Income Tax Act 2025 is that individuals acting as authorized signatories for foreign companies will now have to provide additional personal information, including PAN number and address. From April 2026, they must use Form 96 (formerly 49AA) to apply.
This change is part of a major overhaul of PAN application procedures, where category-specific forms (from 93-96) replaced older forms like 49A and 49AA. The updated framework aims to streamline the process along with strengthening compliance requirements, especially for non-residents and foreign entities with financial ties in India.
What changes for foreign entities under the new rules?
The revised PAN application has stricter documentation requirements for foreign nationals and foreign entities. Under the new rules, foreign individuals are now compulsorily required to provide their Tax Identification Number (TIN) or an equivalent number issued by their home country, says Gaurav Makhijani, managing partner at MGA.
“Furthermore, foreign entities must not only provide their TIN but also appoint a Representative Assessor / Authorized Representative in India who has a valid Indian address. The AR must also submit proof of identity and proof of address,” he noted, referring to the details of Form 96 for PAN application.
This brings about a fundamental change from the earlier framework where foreign entities were not required to compulsorily appoint an authorized representative in India. This adds another procedural layer where the foreign entity now needs to identify a suitable representative, Makhijani said. “This will require doing documentation such as power of attorney and navigating internal management processes.”
What does this mean for authorized signatories of foreign entities?
From the perspective of individuals acting as authorized representatives, the change could create uncertainty and in some cases lead to further exposure to risk, according to Makhijani.
“The intention is to ensure that Indian tax authorities have a reliable point of contact in the country; however, this also means that these agents may receive notices or follow-up in cases of non-compliance, non-filing or non-payment of tax dues where the foreign entity becomes unresponsive,” he pointed out.
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He also stated that while the law does not specifically impose a tax liability on an agent based solely on such a designation, the role carries a perceived administrative burden and potential risk, so individuals are wary of accepting such roles.
An authorized representative can be any person with a valid Indian address and supporting proof of identity and address. This position is often held by executives such as CEOs, CFOs, or unit directors.
What will change for a non-resident person?
Similar changes have also been introduced for non-resident Indians under the new rules. Indian citizens. who qualify as non-resident Indians (NRIs) and residents but not ordinary residents (RNORs) are now required to provide their passport number in the PAN application, according to an expert.
“NRI is not limited to individuals associated with foreign entities. It is a tax resident status. Resident status under Indian tax law is determined on the basis of physical presence in India,” he said.
Similarly, an Indian citizen working abroad for an extended period may qualify as an NRI, while a foreign national working in India could become a tax resident depending on the length of stay, he said. The PAN requirements applicable to NRIs are therefore based on tax residency status and apply irrespective of any connection with foreign entities.
