PAN Now Mandatory to Send Money Abroad

In order to closely monitor money remitted under the liberalised remittance scheme (LRS), the Reserve Bank of India (RBI) has made PAN mandatory for the all users, as per its statement.

This means that you will not be able to send money to your kids or relatives abroad, buy property or shares in other countries without RBI's knowledge and this will not allow you to exceed annual limits imposed on it. As per the earlier rules, one did not have to give PAN details for transactions less than $25,000.

The LRS was opened to residents in India in 2004 to remit $250,000 overseas per financial year for a permissible set of current or capital account transactions. These are permitted for overseas education, travel, medical treatment and also to purchase shares and property or make donations. One can also open, maintain and hold foreign currency accounts with a foreign bank to make transaction.

However, individuals are not allowed to trade or place speculative bets in foreign exchange markets, or even purchase Foreign Currency Convertible Bonds issued by Indian companies abroad.

One also cannot send money to 'non-cooperative' countries or those with terrorist risk as identified by the Financial Action Task Force.

The scheme allows the Indian government to watch foreign exchange movements in and out of the country.