PAN not must for hedge funds operating in IFSCs

Foreign hedge funds can now operate in International Financial Services Centres in the country without getting a permanent account number, or PAN. Foreign investors of category III alternative investment funds (AIFs) operating in IFSCs will not require PAN if they deduct tax from their income and provide details of investors’ name, address, country of residence and Tax Identification Numbers every quarter, the Central Board of Direct Taxes notified on Tuesday.

Category III AIFs include hedge funds. The board had already granted this exemption to foreign investors of AIF categories I and II. The move follows a representation by International Financial Services Centres Authority (IFSCA), an official said, adding, “This would pave way for a large number of category III AIF establishing a base in IFSCs.”