A foreign company receiving income from India, whether as royalty, fees for technical services (FTS), interest, or dividends, must obtain a PAN (Permanent Account Number) in India to claim DTAA benefits, file an Income Tax Return, or avoid higher TDS deductions. Without a PAN, the Indian payer is required to deduct TDS at 20% or the applicable rate under Section 206AA, whichever is higher. Taxocity handles end-to-end PAN procurement for foreign companies, including DSC of the foreign signatory, Income Tax login creation, and DTAA compliance filings.

• PAN is mandatory for claiming DTAA benefits and filing ITR in India
• Required documents include passport copy, address proof, and authorised signatory details
• A DSC (Digital Signature Certificate) of the foreign authorised signatory is needed to file ITR after obtaining PAN

Why Does a Foreign Company Need PAN in India?

Under the Direct Tax Code 2025 (applicable from AY 2026-27 onwards), a foreign company earning income sourced from India is liable to taxation. PAN acts as the primary identification number for all tax-related transactions in India.

A foreign company specifically needs PAN in the following situations:

• To claim benefits under a Double Taxation Avoidance Agreement (DTAA) between India and the company's country of residence
• To file an Income Tax Return (ITR) in India (mandatory if DTAA benefit is claimed)
• To avoid the higher TDS rate under Section 206AA (which applies if PAN is not furnished)
• To create an Income Tax login on the Income Tax e-filing portal
• For receiving payments under Section 115A at the applicable rate of 20% + Surcharge + Cess, rather than the inflated Section 206AA rate

It is important to note: if a foreign company only pays tax under Section 115A (for royalty or FTS) and does not claim DTAA benefit, filing an ITR is not mandatory. However, if the foreign company opts to claim the lower DTAA rate, it must file an ITR in India, which requires a PAN and an Income Tax login.

DTAA Benefit: What Documents Are Needed?

For a foreign company to successfully claim DTAA benefit in India, the following are mandatory prerequisites in addition to PAN:

Document / Requirement	Purpose
Tax Residency Certificate (TRC)	Proof that the foreign company is a tax resident of the treaty country
Form 10F	Self-declaration by the foreign company supporting TRC
No Permanent Establishment (No PE) Declaration	Declares that the foreign company does not have a PE in India
PAN Card	Mandatory for ITR filing and income tax login in India
Income Tax Login (e-filing portal)	Required to file ITR and access tax records
DSC of Authorised Signatory	Required for digital signing of ITR and other filings

Step-by-Step: How to Get PAN for a Foreign Company (2026)

Step 1: Identify the Authorised Signatory

The foreign company must designate an authorised signatory who will represent the company for all Indian tax purposes. This is typically a director, partner, or a duly authorised officer of the foreign company. Their details will be required on the PAN application.

Step 2: Gather the Required Documents

The following documents are required to apply for PAN for a foreign company in India:

• Certificate of Incorporation or registration documents of the foreign company (apostilled or notarised as applicable)
• Proof of registered office address of the foreign company (bank statement, utility bill, or incorporation document showing address)
• Passport copy of the authorised signatory
• Address proof of the authorised signatory (driving licence, utility bill, or government-issued ID)
• Photograph of the authorised signatory
• Board resolution or power of attorney authorising the signatory

Step 3: Fill Form 49AA

Foreign companies (entities incorporated outside India) apply for PAN using Form 49AA. This is different from Form 49A, which is used by Indian entities and resident individuals. The form must be filled carefully with the company's legal name exactly as it appears on the incorporation certificate.

Step 4: Submit Application Through NSDL / UTIITSL

The completed Form 49AA, along with all supporting documents, must be submitted to an authorised NSDL or UTIITSL PAN service centre. Alternatively, the application can be filed online through the NSDL e-Governance portal. The documents need to be properly attested or apostilled as per the country of incorporation.

Step 5: Receive PAN and Create Income Tax Login

Once PAN is allotted, the foreign company must use the PAN to register on the Income Tax e-filing portal (www.incometax.gov.in). This creates the Income Tax login, which is essential for filing ITR, submitting Form 10F online, and accessing tax demand or refund notices.

Step 6: Obtain DSC of the Foreign Authorised Signatory

This is a critical and often overlooked step. A Digital Signature Certificate (DSC) of the foreign authorised signatory is mandatory for e-filing the ITR in India. A regular DSC of a director or partner does not substitute for this requirement when filing on behalf of a foreign entity.

To obtain DSC for a foreign individual, the following are required:

• Email OTP and phone OTP from the foreign individual
• Video verification of the foreign individual (conducted by the DSC-issuing authority)
• Address proof (driving licence or equivalent)
• Photograph of the individual
• Copy of passport

This process requires coordination with a licensed Certifying Authority (CA) in India that is authorised to issue DSCs. Taxocity's experts manage this entire process on behalf of the foreign company, including liaising with the foreign signatory for video verification.

DTAA Rates: What Tax Does a Foreign Company Pay in India?

The rate of tax on royalty or fees for technical services under Section 115A is 20% + Surcharge + Cess. However, if the foreign company's country has a DTAA with India offering a lower rate, they can claim that rate provided all DTAA compliance requirements are met.

Key DTAA rates for royalty and FTS (compared against Section 115A):

Country	DTAA Rate (Royalty / FTS)	Section 115A Rate
UAE	10%	20% + SC + Cess
Sweden	10%	20% + SC + Cess
Switzerland	10%	20% + SC + Cess
Russia	10%	20% + SC + Cess
China	10%	20% + SC + Cess
South Korea	10%	20% + SC + Cess
Italy	20%	20% + SC + Cess
Denmark	20%	20% + SC + Cess

As visible above, for many treaty countries the DTAA rate is significantly lower than Section 115A. Claiming this benefit requires full compliance, including PAN, TRC, Form 10F, No PE declaration, and ITR filing.

Common Mistakes Foreign Companies Make

• Not obtaining PAN before receiving the first payment: Without PAN, the Indian payer will deduct TDS at a higher rate under Section 206AA
• Submitting Form 10F without an Income Tax login: As per current rules, Form 10F must be filed electronically on the income tax portal, which requires an active login linked to the company's PAN
• Using director's Indian DSC instead of foreign signatory's DSC: ITR of a foreign company must be digitally signed by the foreign authorised signatory's DSC specifically
• Missing the ITR filing deadline: If DTAA benefit is claimed, the foreign company must file ITR by the applicable due date or the benefit may be disallowed
• Incorrect entity name on Form 49AA: The company name must match exactly with the certificate of incorporation

How Taxocity Helps Foreign Companies

Taxocity, with over three decades of experience in Indian taxation and compliance, provides complete end-to-end support for foreign companies earning income from India. Our services include:

• PAN application (Form 49AA) preparation and submission
• Income Tax e-filing portal registration and login creation
• DSC procurement for foreign authorised signatories (including video verification coordination)
• TRC, Form 10F, and No PE declaration filing
• Income Tax Return filing for foreign companies in India
• DTAA benefit analysis and advisory

With a 4.8/5 rating from 5,000+ clients and a 100% compliance guarantee, real human tax experts at Taxocity guide your foreign company through every step, from documentation to final assessment. There are no automated bots, just experienced professionals who understand India's cross-border tax landscape.

Key Takeaways

1. Foreign companies earning income from India must obtain PAN using Form 49AA
2. PAN is required to create an Income Tax login and file ITR in India
3. Claiming DTAA benefit requires PAN + TRC + Form 10F + No PE declaration + ITR filing
4. DSC of the foreign authorised signatory (not the Indian director's DSC) is mandatory for ITR e-filing
5. Section 115A rate is 20% + Surcharge + Cess; DTAA rates can be as low as 10% for eligible companies
6. If only Section 115A tax is paid (without claiming DTAA benefit), ITR filing is not mandatory
7. Once DTAA benefit is claimed, ITR filing becomes mandatory in India

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Disclaimer: This article is for informational purposes only and does not constitute tax advice. Tax laws and DTAA provisions are subject to change. Please consult a qualified tax advisor or the experts at Taxocity before making any tax or compliance decisions.