What is a PAN Card & why you need Permanent Account Number in India?

Lot of NRIs, PIOs & OCIs need to know why it is mandatory & necessary to have a PAN Card?

Yes it is important for even non resident Indians – NRIs to have a PAN CARD if one needs to invest in the Indian stock market (including shares & Indian mutual funds) & carry any kind of financial transaction in India. The Indian Share Market is currently doing very well and the Indian economy is expected to grow at 8% and above this year. Hence this is a very good time for investors to invest in the same.

Apply for a PAN card online through private Broker at: www.PanCardOnline.com

Or you may directly try to find government PAN Service Centres in India. You have to allow at least 15 days for the PAN Card to be delivered to your foreign residence/address from the PAN centers. However if you have applied for and made payment through the Internet, your PAN may be allotted to you on priority and communicated to you via email. Later, you can also track your PAN status online.

But, there are a few formalities to be completed before one can start investing.

First and foremost, you need to have a Permanent Account Number (PAN). A ten-digit alphanumeric code, it’s a must for all those entering into any kind of financial transaction. Issued by the Income Tax (I-T) Department in the form of a laminated card and needed for financial investments over RS.50000, the relevant PAN application form for NRIs (Form 49A) can be downloaded from the Internet or bought from the help centres set up by the I-T Department under the heads of UTI, UTIISL or NSDL.

Form 49A requires you to give details such as full name including any other name (if any), residential and business address, age, nationality, and name and address of your representative in India. The Indian Mission in your resident country must attest your proof of name and address. You have to also attach and attest two recent photographs of yours and send it to your broker to be submitted at the address given on the site.

Note: The processing fee of a PAN Form is Rs.962 (inclusive of application fee of Rs.85 + overseas dispatch charges of Rs.771 + 12.36% service charges). This amount can be paid by a demand draft payable at Mumbai or Delhi.

What is a PAN Card and how can an NRI get it form any part of the world?

As mentioned above, PAN or Permanent Account Number is a unique ten-digit alphanumeric code issued in the form of a laminated card to all those involved in any kind of financial transaction. As per the Income Tax (I-T) Department’s rules, it has become mandatory to quote PAN and if you want to:

  • Pay Tax in India
  • Open up a DMAT Account
  • Deposit Rs.50000 and above in bank
  • Invest in Mutual Funds of India, Shares and/or Post Office Savings in excess of Rs.50000 each
  • Buy or sell automobiles excluding two-wheelers
  • Open up a Online Trading Account for NRI.
  • Buy or sell immovable property worth Rs.5 lakh and above
  • Apply for a new telephone (landline or mobile) connection
  • Want to exercise or convert your ESOP into shares or put in Demat Account.
  • Have to pay Rs.25000 and above as hotel bills
  • To open NRI Bank Account or any other kind of a NRI Account.
  • Want to make investments in India.

Please note that it has also become mandatory to update your PAN number, if you intend to hold a Demat Account in India. But don’t think that PAN only serves as a means to enable you to transact financially. It has other benefits too. Apart from serving as identification for you, PAN also enables you to check your updates tax returns on the I-T Department’s website. It also facilitates you to check whether your employer has deducted tax from your salary or not!

Our experts are often asked if it is necessary to file I-T returns if you have PAN. The answer is NO. While it’s necessary to have PAN if you are a taxpayer, you don’t have to file tax returns just because you have a PAN but don’t forget to consult a tax consultant who offers affordable & economical NRI Services in India. Please remember that you need to file tax returns only if you have a taxable income. You also need to pay tax if you need to claim refund of tax deducted by your employer or the institution making payments to you towards interest or professional services or commission or rent or winnings from lottery / game shows or horse races or contracts etc.

This is the complete list of Countries where PAN CARD is delivered:

√ Argentina
√ Australia
√ Austria
√ Bahrain
√ Bangladesh
√ Barbados
√ Belarus
√ Belgium
√ Bermuda
√ Bhutan
√ Botswana
√ Brazil
√ Brunei Darussalam
√ Bulgaria
√ Cambodia
√ Canada
√ Cape Verde
√ Cayman Islands
√ China
√ Cuba
√ Cyprus
√ Denmark
√ Egypt
√ El Salvador
√ Eritrea
√ Estonia
√ Ethiopia
√ Fiji
√ France
√ Georgia
√ Germany
√ Ghana
√ Greece
√ Guyana
√ Hong Kong
√ Hungary
√ Iceland
√ Indonesia
√ Iran, Islamic Rep
√ Iraq
√ Ireland
√ Israel
√ Italy
√ Japan
√ Jordan
√ Kenya
√ Korea, Dem Re
√ Kuwait
√ Latvia
√ Luxembourg
√ Macao
√ Malawi
√ Malaysia
√ Maldives
√ Mauritius
√ Mexico
√ Mongolia
√ Morocco
√ Namibia
√ Nauru
√ Nepal
√ Netherlands
√ New Zealand
√ Niger
√ Nigeria
√ Norway
√ Oman
√ Pakistan
√ Panama
√ Papua New Guinea
√ Philippines
√ Poland
√ Portugal
√ Qatar
√ Romania
√ Russian Federation
√ Rwanda
√ Saudi Arabia
√ Senegal
√ Singapore
√ South Africa
√ Spain
√ Sri Lanka
√ Sudan
√ Sweden
√ Switzerland
√ Taiwan, Pr of China
√ Tanzania, United Re
√ Thailand
√ Tunisia
√ Turkey
√ Uganda
√ Ukraine
√ United Arab
Emirates (UAE)
√ United Kingdom (U.K)
√ United States
of America (U.S.A)
√ Uruguay
√ Viet Nam
√ Yemen
√ Zair
√ Zimbabwe

If you belong to any of the category mentioned above, you need to get a PAN. Are you wondering how to get one? Well, PAN is the simplest thing to get nowadays thanks to technology and help centres set up by the I-T Department. All you have to do is fill up Form 49A and submit the same, with the relevant documents asked for, to the nearest UTI, UTIISL or NSDL centre. You can also submit the same to your representative in India (in case you are a non-resident) or to your broker/agent, who will, on your behalf, submit it to the relevant centre and get you your PAN. However, if you require PAN immediately, you can apply and make the payment for the same online, and the I-T Department, on priority basis, will issue a TATKAL PAN to you.

While the personal details and documents required with the filled up form is mentioned in the form itself, for the convenience of our clients, we are providing a list of the details and documents needed.

  1. Full name including other names, if any
  2. Father’s name (to be given even in case of married women)
  3. Date of Birth
  4. Residential and Office Address
  5. Main source of your income
  6. Designation and code of your Assessing Officer (this may be obtained from the facilitation centre or the Internet)
  7. Proof of Identity
  8. Proof of Address
  9. A recent coloured photograph (size: 3.5 x 2.5 cm)

For detail numbers 7 and 8 (proof of identity and address), you may submit a copy of any of the following:

    • Passport
    • Credit card
    • Bank statement
    • Voter’s ID card
    • Depository account
    • Driving licence
    • Ration card
    • Property tax assessment order
    • School leaving certificate
    • Matriculation certificate
    • Degree from a recognised university
    • Water bill, electricity bill or telephone bill
    • Employer certificate
    • Rent receipt
    • In general, you need a pan number if you want to invest in India thus allowing you to avail various kinds of NRI Services.

If you don’t have any of these, don’t panic. You just have to make a trip to your local MP, MLA, Municipal Councillor or a Gazetted Officer and obtain a signed proof of identity and address.

Non-residents please note: Your proof of identity and address needs to be attested by the Indian Mission in your country.

We often get queries from non-residents asking how to get PAN as they do not reside in India. Such people may apply PAN Card through a representative (who is to be an individual resident in India). In recent times, non-residents are permitted to apply for PAN directly provided they provide a copy of the passport as proof of identity and address. A copy of the Bank Statement needs to be given as proof of address IF the address is different from that provided in the passport. These documents need to be verified by the Indian Mission in your country requiring of you to make a trip to the Excellency’s Office.

Important Pointers:

  • You can have only ONE PAN. A Duplicate copy may be issued in case of the loss of the first one. For that you can download the NRI PAN Application form online. Having more than one PAN is a punishable offence.
  • You can file tax returns from any part of the country irrespective of the place of issue of your PAN, in case of change of address or jurisdiction.
  • If you wish to correct some particulars in your PAN, an application for the same may be submitted to the I-T Office ensuring that your records are updated there too.

Investment Tips for Non-Residents:

Non-residents who wish to invest in India, now, for various reasons, need to adhere to a long list of rules and regulations framed by the Government of India, and the Securities and Exchange Board of India (SEBI).

But before we go on to enlighten you about the new rules, we will, for your comfort, define, who, according to the Foreign Exchange Maintenance Act 1999 (FEMA ’99), qualify for the category of “non-residents”.

A Non-resident Indian implies a person who is a citizen of India or a person of Indian Origin, and is residing outside India. FEMA ’99 defines ‘resident outside India‘ in its Section 2(w) as a person who is not a resident of India.

FEMA ’99 also defines ‘resident of India‘ under Section 2(v) as a person residing in India for more than 182 days during the course of the preceding financial year BUT DOES NOT INCLUDE:

a) A person who has gone out of India or stays outside India

  • For or on taking up employment outside India
  • For carrying on outside India a business or vocation
  • For any purpose under circumstances that would indicate her/his having to stay outside India indefinitely

b) A person who has come to or stays in India, in either case, other than

  • For or on taking up employment outside India
  • For carrying on outside India a business or vocation
  • For any purpose under circumstances that would indicate her/his having to stay outside India indefinitely

c) A foreign citizen (excluding citizens of Pakistan and Bangladesh) is judged to be a person of Indian origin IF

  • S/he has, at any point of time, held an Indian Passport
  • S/he, either of her/his parents or grandparents, was a citizen of India in accordance with the Constitution of India or Citizenship Act 1955

Now that you know how India defines a non-resident, we shall now tell you the new rules and regulations to be followed for investing in India.

Non-residents are to check RBI notifications for scrip that disallows further investment. Every non-resident is allowed to invest up to 5% of the paid up capital of the company with the overall ceiling being 10%. This overall ceiling can be raised to 30% if the desired company passes a board resolution and a special resolution in its general body meeting. If the orders are placed in scrip under the Restricted/Watch List of the Reserve Bank of India (RBI), the investor may have to place a square off order. In such a case, loss on such square will be debited to the investor’s account, but the profit will not be credited. This is because according to RBI, non-residents are not allowed to square off trade during the same settlement period. Hence, non-residents should always place holds on funds while placing an order and at the time of selling shares.

2 thoughts on “What is a PAN Card & why you need Permanent Account Number in India?

  1. Indian High Comission does not attest Proof of Address for PIO Card Holders

    The Indian High Comission Consular Services in London REFUSES to attest PIO Card’s address page inspite of the original address proof documents (Bank Statement and Telephone Bill) provided. ***The address is exactly the same in PIO Card, Bank Statement and Telephone Bill***.

    They INSIST in a strong tone that they would attest the photo page of a PIO Card ONLY and they consider the address page of a PIO Card as a foriegn document which sounds silly. They went on to say that it is their RULE to attest the photo page ONLY.

    The solution provided by them is that, the address page copy of the PIO Card has to be notarized and then attested by Foreign Commonwealth Office (FCO).

    They also INSIST that they would ONLY attest the documents issued by them. So they DO NOT attest foreign passports or copy of Bank Statements.

    So much to go through to pay tax!!!

    Has any one went through a similar situation?

  2. Dear Sir/Madam

    I have got a NZ passort (Not and Indian Passort) Can I apply for a pan card?

    My dad had a Indian Passport long time back (25+ years ago) which has now expired and is now on a NZ passport only, can he apply for a PAN CARD? or is it compulsory to have a Indian passport?

    Please reply as soon as possible on my email k.chhitu@gmail.com

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