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PAN for parent company.

(Querist) 18 August 2008 This query is : Resolved 
A parent company located outside India has earned ( accrued but not paid) Rs.4500 as interest from its wholly owned subsidiary located in India.

Does the parent company has to obtain a PAN number to file its return in India for the interest income received from India. It has no other income.

Thanks
Manish Singh (Expert) 18 August 2008
it would be the subsidiary company who has to get the PAN not the parent company.

Any income received in India even if by aforeign compnay shall be treated as income earned in India and thus it shall be liable to be taxed in India.

Since the said subsidiary must have been incorporated under Indian Companies act, youlook into the matter whther ur income is exempted from tax or not under Indian tax laws..

Anil (Querist) 19 August 2008
Please Correct me if I am wrong:

Income Tax Section 139 says:

When the total income from all sources of income of any person exceeds the maximum amount which is not chargeable to income-tax in any previous year ending on 31st March then that person is liable to file the Income Tax Return.

From the above it is clear that the parent company has to file its return since there is no maximum amount which is not chargeable to income tax for comapnies. For filing of its return is it not necessary to get PAN?

I have no doubts regarding treatment of Indian Subsidiary.

Manish Singh (Expert) 19 August 2008
Look, the thing here is repatraition of foreign investment so better look for the fact whether your income so earned and repatriated to the parent company is according to the regulations of RBI or not.
if its the permissible income then you ahve nothing to do but if its not permissible, you will have to inform the RBI.
you dont need to take PAN for this purpose.


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