India Issues New Permanent Account Number (PAN) Application Form 49AA For Foreign Residents/Entities
The Income Tax Department of India recently issued a new PAN (Permanent Account Number) application form (Form No. 49AA) for foreign residents/entities.
- (1888PressRelease) November 04, 2011 - Sunnyvale, CA - Foreign companies involved in business transactions in India need to apply for a PAN to avoid a higher withholding tax that is applicable to non-PAN holders. An Indian payer has to deduct tax at the rate of 20% or the applicable rate, whichever is higher, from payments made to a non-PAN holder payee.
The higher withholding tax rate applies to a foreign payee even if such payee does not have any entity, employee or presence in India.
The new application form, effective from November 1, 2011, applies to:
*Companies registered outside India;
*Individuals not being citizens of India;
*LLPs registered outside India;
*Firms or Association of persons(Trusts or otherwise) formed or registered outside India;
* Other specified entities registered outside India.
"Any person or organization receiving any form of payment from India is required to have a PAN to avoid higher tax deduction. Nair & Co.'s legal team has been processing PAN applications for many of its clients ever since the higher withholding tax rate came into force on 1st April, 2010," said Dr. Shan Nair, CEO & Co-Founder of Nair & Co.
"It is important to note that a non-resident payee cannot obtain a non-deduction of withholding tax certificate without quoting the PAN," he added.
About Nair & Co.
Nair & Co. provides you with your one touch outsourced finance, compliance, HR and legal department for your international operations. If you are expanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at www.nair-co.com
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