Markets regulator Sebi and the Central Board of Direct Taxes (CBDT) have implemented comprehensive changes to address concerns raised by foreign portfolio investors regarding Income Tax Permanent Account Number (PAN)-related difficulties in registering in India. According to a Sebi statement issued on Friday, the move is part of Sebi's ease of investing initiative to simplify the registration process for foreign portfolio investors. The changes came after CBDT notified new income tax rules and introduced new forms on March 20, 2026, which prompted FPIs to approach the regulator with their concerns. The latest clarifications come as Sebi said the Central Board of Direct Taxes (CBDT) has relaxed certain PAN allotment-related requirements for FPIs after industry participants flagged operational difficulties under the newly notified Income-tax Rules, 2026. As per Sebi's latest statement, the regulator actively engaged with CBDT after receiving representations from stakeholders to ensure that the PAN issuance framework remained smooth and investor-friendly. The clarifications were issued by CBDT after Sebi took up with the authority concerns raised by stakeholders regarding the new PAN application forms notified under the Income-tax Rules, 2026, with the regulator noting that "in view of several difficulties expressed by concerned stakeholders in furnishing such information by FPIs, Sebi actively engaged with CBDT to facilitate continued ease of allotment of PAN to FPIs."
CBDT has clarified that in the common application form (CAF) which FPIs use to register with Sebi to open bank and demat accounts, the name of the authorised signatory mentioned in the Common Application Form (CAF) would be sufficient for the representative assessee or authorised representative field in PAN applications. Earlier rules had stipulated that the representative assessee (RA) or the authorised representative (AR) had to sign the CAF. Additionally, CBDT allowed FPIs to use '0000000000' for Taxpayer Identification Number (TIN) when TIN or its equivalent is not applicable for a jurisdiction, as reported by Sebi. The latest clarifications allow FPIs greater flexibility in furnishing representative details, taxpayer identification numbers and contact information while applying for PAN through the Common Application Form (CAF). CBDT further eased address and contact-related compliance requirements, stating that if details such as mobile number, landline number or email address of the authorised signatory are unavailable, FPIs may provide their own contact information instead. The tax department also clarified that the liability of the authorised signatory would remain limited only to the purpose of applying for PAN and that no supporting documents related to the authorised signatory or representative assessee would be required.
The regulatory changes also provide significant flexibility in contact details requirements. According to the Sebi statement, if PAN, Aadhaar and passport number of the AS are available, the same may be furnished. In case these details are not available, the FPI registration number can be provided for the registration process. If an FPI does not have a mobile number, it may provide a landline number instead while furnishing contact details. The measures are specifically aimed at ensuring continued ease of onboarding for foreign investors. FPIs currently use a single Common Application Form for multiple regulatory processes including Sebi registration, opening bank and demat accounts and obtaining PAN registration in India. In the RA/AR contact details section, FPIs may provide the authorised signatory's address, phone number and email ID if available. If such details are not available, the corresponding details of the FPI itself can be furnished. The regulator noted that "the above measures resonate with the continuous efforts towards providing ease of onboarding to FPIs."
The regulatory easing comes amid sustained overseas outflows from Indian equities, with FPIs pulling out over ₹2.1 trillion from the domestic markets so far this year. As per Sebi's latest statement, the move to ease compliance and onboarding hurdles for foreign portfolio investors (FPIs) comes amid continued overseas outflows from Indian equities. The regulatory changes are designed to address the operational difficulties that foreign investors have been experiencing under the newly notified Income-tax Rules, 2026, while maintaining the overall ease of investing initiative for foreign portfolio investors. The issue had arisen after the updated PAN forms introduced additional mandatory fields including taxpayer identification number details, representative assessee information and compulsory mobile number disclosure requirements, which foreign investors and market intermediaries found difficult to comply with across multiple jurisdictions. SEBI said the measures are part of ongoing efforts to improve ease of onboarding for FPIs and strengthen India's attractiveness as an investment destination. This clarification is significant because FPIs use a single Common Application Form (CAF) for several key requirements in India, including SEBI registration, opening bank and demat accounts, and applying for PAN. Any delays or complications in the PAN process can therefore slow down the onboarding of foreign investors.
