PAN for overseas consultant

[seetha lakshmi]

Is there a statutory obligation for a overseas company to obtain PAN if they are going to send in their consultant to offer services in India for a period of 5 months? What are the implications of not obtaining a PAN? The company is a Singapore company which has a double tax treaty with India.

AI Summary

Singapore Firm Sending Consultant to India Must Obtain PAN to Avoid Higher TDS and Comply with Section 44DA. A Singapore company plans to send a consultant to India for five months and inquires about the necessity of obtaining a Permanent Account Number (PAN). Responses indicate that if the non-resident receives income subject to Tax Deducted at Source (TDS), they must have a PAN; otherwise, TDS rates would be 20%. Additionally, if the stay exceeds 90 days, the company may form a service Permanent Establishment (PE) in India, making the income taxable under section 44DA of the Income Tax Act, 1961, and also under the India-Singapore tax treaty. It is advised to obtain a PAN and an order from the Income Tax Officer before making payments.