Permanent Account Number or PAN is mandatory for many transactions now. As an NRI, you will need a PAN card for a broad range of operations that you may plan to do in India - be it investing in the stock markets, buying property, or getting a credit card.
An NRI (non-resident Indian) also needs to obtain a PAN if he falls into either of the below categories.
Pan card is a requirement 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. If you have taxable income in India, you should get a pan card and file a tax return.
Whenever an NRI has any income on which tax is required to be deducted at source, it is mandatory to 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%.
NRI not having PAN card cannot do the share trading by depository or broker according to SEBI's new rule. You must have a Pan Number to open a Demat account.
PAN is also mandatory for an NRI if he or she would like to invest in Mutual Funds.
If an NRI doesn't want to trade but wants to purchase some land or other property in India then also it is mandatory to have PAN card issued by Government of India.
Bonds, credit cards, and LIC premium
For nvesting 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 who are Indian citizens have to apply for a PAN by filling Form 49A. NRIs with citizenship of another country need to fill up Form 49AA. Filled and submitted online through the websites of UTIITSL and NSDL.
By submitting the form, an acknowledgment copy with a 15 digit number is generated. This copy needs to be sent to the designated address along with other documents.
The following documents are required for applying PAN card for an NRI:
- Two photographs
- A copy of the passport as proof of identity.
- A copy of bank account statement in country of residence Copy of NRE bank account statement showing at least two transactions in six months and duly attested.
So, if you are an NRI and have not applied for PAN card, you should. It is much needed.