(Image source from: Business Insider India)
Permanent Account Number or PAN is compulsory for many transactions now and the process to obtain a PAN is fairly simple and similar across all categories of individuals. As an NRI, you need to possess a PAN card for a broad range of operations that you may plan to do in India.
An NRI (Non-Resident Indian) also needs to obtain a PAN if he falls into either of the below categories.
Pan card is required only if a person has income on which tax is payable in India. There will be millions of people in India who have Pan cards and have never filed taxes. An NRI is liable to file income-tax returns in India in case his taxable income in India is above the threshold limit. PAN Card is required by an NRI if he or she has got a taxable income in India. In case you have taxable income in India then you should get a pan card and file a tax return.
Tax Deducted at Source (TDS)
It is mandatory to possess a PAN card Whenever an NRI has any income on which tax is required to be deducted at source, furnish the PAN to the deductor. If the NRI failed to submit PAN Card deductor will deduct tax at source at the higher of the rate prescribed under the Double Tax Avoidance Agreement, or the Income-tax Act or at 20 percent.
PAN is also mandatory for an NRI if he or she would like to invest in Mutual Funds.
NRI not having PAN card cannot do the share trading by depository or broker according to SEBI's new rule. It is mandatory to have a Pan Number to open a Demat account.
If an NRI doesn't want to trade but rather wants to purchase some property or land in India then also it is mandatory to have PAN card issued by the Government of India.
Bonds, Credit Cards, and LIC Premium
For investing in debentures or bonds of a company, payment of life insurance premium, opening a bank account, NRI needs to furnish PAN Card details. NRIs also need PAN Card number while applying for a credit card in India.
How to Apply for PAN Card in India?
NRIs have to apply for a PAN by filling Form 49A, however, NRIs with citizenship of another country need to fill up Form 49AA. After filling, the forms should be submitted online through the websites of UTIITSL and NSDL. Once the form submission is done, an acknowledgment copy with a 15 digit number will be generated, which needs to be sent to the designated address along with other documents.
Documents Required to Apply for PAN Card in India
Documents required are:
1. Two photographs
2. copy of the passport as proof of identity.
3. A copy of the bank account statement in country of residence
4. Copy of Non-Resident Rupee (NRE) bank account statement showing at least two transactions in six months and duly attested.
By Sowmya Sangam