Permanent Account Number commonly known as PAN issued to Non – Resident Indians (NRI), is a 10-digit alphanumeric number, issued by the Income Tax Department of India.
The Permanent Account Number (PAN) is unique to an individual and it is valid across India. PAN once allotted to an individual is unaffected by a change of name, address, or other factors.
Why PAN for NRI: –
- PAN Card is essential for NRI if that NRI has got a taxable income in India.
- As per the new rule of SEBI, any NRI who does not have PAN card cannot do the share trading by depository or broker.
- PAN Card is also essential for an NRI if he/she would like to invest in Mutual Funds.
- PAN Card is mandatory when he/she wants to open an NRO or NRE account.
- If an NRI does not want to trade but wants to purchase some land or other property in India, then in this case you need to have PAN card issued by Government of India.
What are the Forms Applicable for NRI?
There are 2 Forms available which are mention below: –
1. Form 49A: It is for the application for allotment of New PAN – applicable for Citizens of India.
This PAN application form will be used by such NRIs who have Indian Citizenship
2. Form 49AA: Application for allotment of New PAN (Form 49AA) – applicable for foreign citizens.
This PAN application form will be used by such NRIs who have Foreign Citizenship. OCI holders, PIOs are required to use this form for getting PAN Card.
Note: However, a Qualified Foreign Investor aka QFI need to apply for PAN in Form 49AA through a Depository Participant only.
What are the Essential Documents Required?
AN NRI is required to provide documents for proof of identity, proof of address and DOB.
| Identity Proof | Address Proof | Proof of D.O.B. |
| Aadhaar Card | Aadhaar Card | Birth certificate |
| Bank certificate | Statement of Bank account | Order for pension payment |
| Passport | Passport | Passport |
| Driving license | Driving license | Driving license |
What are the Things to Avoid While Filling the PAN Card Application for NRIs?
- It is advisable to avoid overwriting and doing corrections in the given application.
- Do not staple the photographs.
- Do not write the husband’s name in the father’s name column.
- Do not apply for the PAN card if you already possess one.
What Are the Benefits of NRI PAN?
NRI PAN is a widely accepted as your proof of identity throughout the country. So, holding a PAN does not only help into entering various transactions but also smoothen identity related activities.
PAN can have following benefits:
After getting PAN Card it will keep smooth flow of taxation procedure
You can easily purchase properties, land, and assets.
You can invest in the capital market.
What is the Payment Procedure for NRI PAN Card?
An individual can pay his/her fees through these payment methods like debit card, credit card or net banking for online payment methods.
If an NRI wants to pay the fee offline, he/she can issue a demand draft.
What is the Penalty and Consequences for Non-compliance?
Penalty- If NRI holding more than one NRI PAN
Income tax act permits a person to hold only one PAN card. So, if a person holds more than one PAN card then a penalty of INR 10,000 will be imposed under Income Tax Act- section 272B.
If you are allotted by mistaken with more than PAN, then it advisable to surrender the additional PAN.
Penalty- If you are not holding PAN or incorrect reporting of PAN
Every person who is essentially required to hold a PAN will provide correct PAN for the transactions provided under Rule 114B.
So, if a person fails to hold a PAN or intentionally quote incorrect PAN, wherever required, then a penalty of INR 10,000 will be imposed under Income Tax Act- section 272B.