The Non-Resident Indian (NRI) status is hugely important from a taxation perspective. Because taxation is an evolving body of rules and regulations the definition of NRI is also prone to changes. Find out whether you qualify as an NRI or not, here.
A PAN card is crucial for any transactions pertaining to India or having taxable income in the country. “PAN” stands for Permanent Account Number and is a tax ID similar to a Social Security Number (SSN) in the U.S. and Social Insurance Number (SIN) in Canada.
PAN cards function the same way for everyone, regardless of citizenship.
This article focuses on the PAN card for NRIs only and includes a few related FAQs.
Note: For the sake of simplicity and clarity, this article treats any citizen of India who is residing outside India, as well as a person of Indian origin, as an NRI. Also, foreigners (not necessarily a PIO) can apply for PAN card if they need to.
Why is a PAN card necessary?
A PAN card is the key to an NRI’s identity for the Income Tax Department of India. It is a required document for filing income tax returns in India. Also, the document becomes a necessity when you wish to undertake major financial transactions in India.
Before diving into the procedure, let’s take a look at what PAN cards are used for:
- Opening NRO or NRE accounts, or for taking loans
- Investing in mutual funds or stocks in India
- Filing income tax returns for taxable income in India
- Share-trading through depositary or broker
- Purchasing land or property in India
There is a common myth surrounding the PAN card. Having a PAN card doesn’t mean that there is a need to file income tax returns each year.
The Application Process
It’s a simple process to apply for a PAN card, even for an NRI. These are the standard rules for filing for a PAN card.
The Form
The PAN application, coupled with Form 49A (meant for an NRI), requires submission. This form is only for NRIs who are Indian citizens. Form 49AA is only for foreign nationals with citizenship in another country, which obviously also includes Persons of Indian Origin (PIOs).
The forms can be submitted online via the official website or in person (if you are in India). There is an acknowledgment receipt given on the submission of the form, along with a 15-digit code. The application form needs to be sent or mailed to the designated address with accompanying documents.
Documents
Along with the application form, a passport photocopy and two photographs are also required. Submit proof of address with the acknowledgment form after completing the application form, as well. Mail these documents to the PAN application centers of UTIITSL, NSDL, or their official websites.
Payment
The fee varies with the postal address. If the address supplied is in India, the amount comes to ₹107, and if it’s outside India, it amounts to ₹989. These fees could change, so please be sure to check the official website.
The fees cover the application charges and dispatch charges. Payment is available via net banking, credit/debit card, or demand draft in favor of UTIITSL or NSDL.
Procedure
For online application, the documents and the form should reach the designated address within 15 days. If the payment mode was by demand draft, the PAN card gets issued as soon as the payment is approved.
In case the Indian address is unavailable, there is the option of using the international address as an office or residential address.
Dispatch services are available for international locations. Check the list for countries where dispatch service is available before handing over the form.
Common FAQs Regarding PAN Card
Is there any year-end maintenance or renewal fee?
There is no year-end maintenance fee or any renewal fees. A PAN card is valid for life—unless it’s lost, in which case it needs to be replaced. Holding more than one PAN card is a criminal offense punishable by law.
What Can I Give as Proof of Address?
The passport or a copy of the bank account statement of the country of residence will work. A copy of a duly-attested NRE bank account statement showing at least two transactions in the past six months is also permissible.
Can I Avail Any Fast Track Service?
Unfortunately, there is no urgent service for NRIs. It takes a minimum of 15-20 days for the PAN card to be processed and delivered. It is advisable to get the processing done on an expedited basis.
Does having a PAN number mean I need to file taxes in India?
Only if you make enough money in India do you need to file taxes there. The PAN card only comes into play concerning financial transactions in India.
Do I Need to Visit India for the PAN?
No, there is no need to be present in India to file for a PAN card.
Does Withholding Tax Rates for Companies Reduce?
In certain situations, it does reduce. Please consult a subject matter expert to examine a particular case.
What Is the Meaning of the Letters and Numbers on the PAN Card?
PAN is a 10-digit alphanumeric number issued by the Income Tax Department of India. The PAN number comes in the XXXXX0000A format.
The first three characters are letters of the alphabet. The fourth is for the PAN category: Personal (P), Firm (F), Company (C), etc. The fifth character is the first letter of your last name. The sixth through ninth digits are sequence numbers from 0 to 9, and the tenth digit is the check digit from A-Z.
