NRI Tips: Everything about India PAN card: necessary, compulsory, application..

No, we are not talking about the pan we use in the kitchen. That is also necessary and compulsory but for different needs. :)

PAN – ‘Permanent Account Number’ is issued by the income tax authorities in India. The PAN card is similar to the Social Security Number (SSN) card in USA or the Social Insurance Number (SIN) card in Canada.

The PAN is a ten-digit alphanumeric number, and is in the form of a laminated card. You can only have one (unique) PAN. Well, that is the law.

Why is the PAN card necessary and compulsory?
Straight from the horse’s mouth, according to the Indian Income Tax Department:
‘It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. From 1 January 2005 it will be mandatory to quote PAN for any payments due to Income Tax Department.’
Also, it is compulsory to quote PAN in all documents pertaining to financial transactions. Some examples of the transactions include:

  • Sale and purchase of immovable property
  • Sale or purchase of motor vehicle
  • Payments in cash, of amounts exceeding Rs. 25,000/-to hotels and restaurants or in connection with travel to any foreign country.
  • To obtain a telephone or cellular telephone connection.
  • For making a deposit exceeding Rs. 50,000/- with a Bank or Post Office.

Do NRIs need PAN and why?
As mentioned above, PAN card is required for any financial transitions in India. So, the PAN card is required for any NRI who is planning to:

  • Invest in India; e.g. in Indian stock market
  • Open and maintain a regular or NRI Bank account in India
  • Purchase property in India,
  • Run a business in India, etc.

How to apply for a PAN Card
According to Income Tax department of India, the PAN application should be made only using Form 49A. The PAN application (Form 49A) can be downloaded from the website of Income Tax department or UTIISL or NSDL. The links to these sites are at the bottom of this article.
A printed copy or photocopied (on A4 size 70 GSM paper) form can be used as well, and is available at IT PAN Service centers and TIN Facilitation centers.
One can apply for the PAN card from anywhere; you are not required to be in India. The application can also be submitted via the Internet.

Supporting documents required for the PAN card:
The Income Tax Dept lists the following requirements or documents to apply for the PAN card:
a. A colored photograph (Stamp Size: 3.5 cms x 2.5 cms) affixed to the Form 49A;
b. A document (listed in Rule 114, vivt the site for more details, linked below) as a proof of ‘Identity’ and ‘Address’;
c. Designation and code of the concerned Assessing Officer of Income Tax department will have to be mentioned in Form 49A.
Also, a non-resident person may be represented through a Representative Assessee and the PAN application can be made by the Representative Assessee.

Bottom-line, the Indian Income Tax Department wants financial transactions to be tracked and properly documented with the help of the Pan usage. It also helps the Dept. in making sure that everybody is paying their taxes. By end of the day, it comes down to simple logic – follow the money and tax it accordingly! :)

To apply for PAN, visit the linked sites: Income Tax department or UTIISL or NSDL.

For more information and any clarification, visit the ‘Permanent Account Number overview’ under ‘Income Tax Department’ website linked here.

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