PAN Card for NRIs
PAN is a 10 digit alphanumeric unique identity number issued by the Income Tax Department. The allotment of PAN is done under supervision of CBDT.It is mandatory for taxpayers to have PAN in order to file Income Tax Returns, payment of taxes, correspondence with Income Tax Authorities. In addition there are certain specified business transactions which mandates PAN. In this article we will learn more about PAN cards for NRIs.
Who is an NRI?
- Person who is a citizen of India, who resides in India for a period less than 182 days during the previous financial year. They must hold Indian Passport and Indian Nationality or a person who is an Indian citizen and stays in India for less than 365 days in the last 4 years from the current assessment year and less than 60 days during previous year.
- A ‘Person of Indian Origin (PIO) is a person resident outside India who is a citizen of any country (other than Bangladesh or Pakistan) and needs to comply with the below points to be determined as PIO. PIO holds a foreign Passport.
- Who was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or
- Who belonged to a territory that became part of India after the 15th day of August, 1947; or
- Who is a child or a grandchild or a great-grandchild of a citizen of India or of a person referred to in clause (a) or (b); or
- Who is a spouse of foreign origin of a citizen of India or spouse of foreign origin of a person referred to in clause (a) or (b) (c)
- The Overseas Citizenship of India (OCI) Scheme was introduced by amending the Citizenship Act, 1955, in August 2005. The Scheme offers the registration of a person as an Overseas Citizen of India (OCI) to all Persons of Indian Origin (PIOs) who were either a citizen of India on or after 26th January 1950 or were eligible to become citizens of India on 26th January 1950.OCI hold foreign Passport and OCI card
Under which circumstances does an NRI need PAN?
Although it is not mandatory for NRIs to hold PAN except in following cases;
- NRI has taxable income in India.
- For trading in shares by depository or brokers.
- In order to make investments in mutual funds.
- In order to purchase movable or immovable property in India.
- In order to open a Bank Account. There are three main accounts held by NRI as follows.
- Non Resident External Account (NRE): It is maintained for funds earned outside India. Form 60 can be submitted in lieu of PAN.
- Non Resident Ordinary Account (NRO): This is maintained for funds generated in India.These may include rent, interests etc which are liable to tax. As per Foreign Exchange Management Act, 1999, NRI cannot have a savings Bank Account in their name. PAN card is mandatory for opening an NRO account.
- Foreign Currency Non Resident Bank Account (FCNR (B)): It is like a Fixed Deposit for NRIs . The money deposited in this account in permissible foreign currencies and the interest rate completely depends on the currency type deposited. Form 60 can be submitted in lieu of PAN.
How can NRIs apply for PAN?
- Offline Application: A non-resident Indian can apply for PAN by submitting the application form along with the requisite documents and prescribed fees at the PAN application centre of UTIITSL or Protean (formerly NSDL eGov).
- Online Application: He can also make an online application through the website of UTIITSL or Protean (formerly NSDL eGov).
Which application form is applicable to me?
- People who hold Indian citizenship and are settled abroad should use Form 49A.
- NRI who hold foreign citizenship such as OCI holders or people of Indian Origin who possess foreign citizenship or foreigners who are not of Indian Origin are required to file form 49AA.
What are the documents to be enclosed along with the PAN application form?
- As proof of identity
- NRI is required to submit the copy of passport (alongwith PAN application Form).
- As proof of address:
a) Copy of passport; or
b) Copy of the bank account statement in country of residence; or
c) Copy of NRE bank account statement
(showing at least two transactions in the last six months period and duly attested by Indian Embassy/Consular office/high commission or Apostille or by the manager of the bank in which the account is held. The applicant may be a joint holder).
Prescribed fees for application for PAN?
- PAN apply submitted online using physical mode:
It depends on the communication address provided by the applicant.
- If the communication address is in India, fees for processing PAN is ₹107 with tax
- If the communication address is outside India, fees for processing PAN is ₹1017 with tax plus dispatch charges.
- PAN application submitted online using DSC & scanned documents
- If the communication address is in India, fees for processing PAN is ₹101 with tax.
- If the communication address is outside India, fees for processing PAN is ₹1011
Payment of application fee can be made through credit/debit card, demand draft or net-banking. Once the application and payment is accepted, the applicant is required to send the supporting documents through courier/post to Protean (formerly NSDL eGov)/UTITSL. Only after the receipt of the documents, PAN application would be processed by Protean (formerly NSDL eGov)/UTITSL.
India’s economic growth is offering lucrative opportunities in terms of wealth creation for NRIs. Holding a PAN is mandatory to participate. Application and processing of PAN has been made easier and less time consuming.NRIs can apply PAN from a foreign location. These highlight the convenience in order to facilitate compliance.
Frequently Asked Questions
What is the difference between PAN cards issued to residents and Non Resident?
There is no difference between PAN card issued to resident or Non Resident. The only difference is, the application form incase of applicants who are citizens of India the relevant Form is 49A and incase of foreign citizens the relevant form is 49AA.
Can NRIs apply for a PAN Card without an Aadhaar Card?
It is possible for an NRI to apply for a PAN card, without having an Aadhaar Card. Incase of NRIs a copy of Passport is valid proof of identity.
Is Aadhaar PAN linking Mandatory for NRIs?
It is not mandatory for NRIs to link PAN with Aadhaar card.
If a person who is Resident subsequently takes employment outside India will he need to re apply for PAN Card as NRI?
No, once a PAN card is allotted it is valid on subsequent change in residential status. Holding more than one PAN can attract a penalty of ₹ 10,000. Hence less used PAN should be surrendered,
What is the validity of a PAN card?
Once PAN is allotted it is valid for lifetime.
What are penal consequences for quoting incorrect PAN?
Under Section 272B of the Income-tax Act, 1961, the income tax department may impose a penalty of ₹10,000 if anyone is found to have given an incorrect PAN number. This provision is applicable when you are filing your income tax return (ITR) or in other cases where it is mandatory to quote a PAN card number for carrying out specific financial transactions.