Reporting of transactions with foreign company in ITDREIN portal

When reporting transactions in Form 61A (Statement of Financial Transactions - SFT) for an entity that does not possess a Permanent Account Number (PAN), such as a foreign corporation, you must follow the reporting guidelines established under Rule 114E of the Income Tax Rules, 1962.

How to Report Without a PAN

When a valid PAN is not available, the Income Tax Department allows the use of alternative identification details to ensure the transaction is recorded.

1. Use Alternative Identification: In the "Report Details" (Part B) of the Form 61A utility, the PAN field is mandatory if available. If the counterparty does not have a PAN, you are required to provide other identifying information.

2. Form 60 Acknowledgment: You should obtain a declaration from the foreign entity in Form 60 (as they do not have a PAN). Once you have this, you can enter the Form 60 Acknowledgment Number in the relevant field within the reporting utility.

3. Required Details: Even without a PAN, you must provide comprehensive details to identify the counterparty, which typically includes:

   • Name of the entity.

   • Full Address.

   • Country of incorporation/residence.

   • Tax Identification Number (TIN) or equivalent registration number used in their home country.

4. Data Utility: When using the Java-based "Report Generation Utility" (RGU) provided by the Income Tax Department, ensure you select the appropriate "Person Type" (e.g., "Others" or "Non-Resident") and fill in the mandatory fields that act as substitutes when the PAN field is left blank.

Summary Checklist for Filing

• Registration: Ensure your company has a valid ITDREIN (Income Tax Department Reporting Entity Identification Number) generated on the Reporting Portal.

• Data Preparation: Download the official schema and RGU from the e-filing portal to ensure your XML file meets the current technical requirements.

• Documentation: Always maintain a copy of the Form 60 declaration (or an equivalent KYC document) provided by the foreign entity for your records, as this serves as the legal basis for not reporting a PAN in the SFT.

• Submission: Once the XML is generated and signed with the Digital Signature Certificate (DSC) of your company's Principal Officer, upload it to the Reporting Portal.

Note: Since Form 61A requirements can involve complex data structures, it is highly recommended to consult with your tax advisor or a Chartered Accountant to ensure the XML schema is correctly populated to avoid validation errors or subsequent non-compliance notices.

Summary: For a foreign company without a PAN, you should collect a declaration in Form 60, provide their local Tax Identification Number, and enter the Form 60 Acknowledgment Number into the relevant field in the Form 61A reporting utility.