India Tax: Recent changes to the Indian income tax law

India Tax Reminder: Recent changes to the Indian income tax law mean that, with effect from 1 April 2010, any person entitled to receive a sum on which Indian tax is deductible is required to furnish its Permanent Account Number (PAN) to the payer. Otherwise, tax will have to be withheld at the higher of the rate under Indian domestic law or an applicable tax treaty, or 20%.

If the nonresident fails to submit a PAN to the payer, the tax authorities will not accept an application for a reduced rate of withholding tax under a tax treaty.