CBDT: Relaxation of PAN Requirement For Foreign Entities At GIFT IFSC By CBDT

CBDT Removes PAN Requirement for Foreign Entities at GIFT IFSC: The Central Board of Direct Taxation (CBDT) has issued a notification stating that non-resident individuals and foreign companies opening bank accounts in GIFT IFSC and not earning taxable income in India will no longer need to provide a Permanent Account Number (PAN). 

Instead, they can use Form 60 for their banking transactions. This change will also eliminate the possibility of receiving income tax notices related to PAN. 

The decision is beneficial for foreign companies looking to establish treasury management operations, global institutional investors, and non-residents interested in setting up family investment funds or other structures at GIFT IFSC.

Boost for Foreign Investment at GIFT IFSC

The recent relaxation of PAN requirements for non-residents at GIFT IFSC is expected to boost the banking sector in the region. Now, non-residents can open bank accounts without the need for a PAN and won't have to worry about filing tax returns in India for funds that aren't taxable there.

This change is particularly beneficial for startups that consider GIFT IFSC a viable alternative for their investments. When the Silicon Valley Bank crisis occurred, Indian startups with exposure to SVB looked for alternatives to park their money. 

GIFT IFSC's strong banking ecosystem provided a viable solution. Still, the PAN requirement deterred many of these entities from using GIFT IFSC. With this notification, opening bank accounts at GIFT IFSC will become more accessible, encouraging more foreign entities to consider it for their banking needs.

Also Read: List of Restricted Transactions According to the GST Act 2017