PAN

What is PAN?

Permanent Account Number (PAN) is a unique ten-digit alphanumeric identifier issued by the Income Tax Department of India. This laminated card acts as a crucial link for individuals with the department, connecting various transactions, tax payments, and returns. PAN serves as an identifier, facilitating easy retrieval of information and helping combat tax evasion.

Is PAN Necessary?

Yes, PAN is mandatory for quoting on income tax returns, in correspondence with tax authorities, and on challans for any payments due to the Income Tax Department. Additionally, PAN is compulsory for various financial transactions such as property or vehicle purchases, opening bank accounts, and more.

Who Must Have a PAN?

1. Existing assesses or taxpayers.
2. Individuals carrying on business or profession with sales exceeding five lakh rupees.
3. Those entering financial transactions where PAN quoting is mandatory.
4. Assessing Officers may allot PAN on request.

How to Obtain PAN

NRIeCA offers hassle-free PAN services for NRIs. The application process involves preparing the PAN application, ensuring legal documentation, submission, and overseeing the allotment and delivery of PAN to NRIs.

Documents Required for PAN Application

Identity Proof:

• Passport
• Voter identity card
• Driving license
• School leaving certificate
• Matriculation certificate
• Degree from a recognized educational institution
• Deposition account, credit card, or bank account
• Water bill, ration card, property tax assessment order
• Certificate of identity signed by a Gazetted Officer, MP, MLA, or Municipal Councilor

Address Proof:

• Passport
• Voter identity card
• Property tax assessment order
• Driving license
• Electricity bill
• Telephone bill
• Deposition account, credit card, or bank account
• Ration card
• Employer certificate
• Rent receipt
• Certificate of address signed by a Gazetted Officer, MP, MLA, or Municipal Councilor

Advantages of PAN

• Facilitates linking of various financial documents and transactions.
• Mandatory for income tax returns and corresponding with tax authorities.
• Essential for specific high-value financial transactions.
• Enables easy retrieval of information for assessments and tax-related activities.

Importance of PAN for NRIs in India

Every NRI with income in India or engaging in financial transactions within the country should prioritize obtaining a Permanent Account Number (PAN) for the following compelling reasons:

Mandatory for Financial Transactions:

PAN is essential for various financial transactions, making it a vital requirement to facilitate smooth and penalty-free dealings. Non-compliance may lead to difficulties and potential penalties.

TDS Challan Payments:

PAN is mandatory for payments of Tax Deducted at Source (TDS) challans. For instance, when purchasing property in India exceeding a value of 50 lakhs, TDS at a rate of 1% or higher, as per the Income Tax Act, must be deducted for every payment to the seller.

Online Registration and Access:

Online registration on the Income Tax portal is only possible with a PAN. Through this portal, NRIs can access crucial financial information such as Form 26AS and High-Value Transactions. It also facilitates the filing of income tax returns for compliance and potential refunds.

TDS Deductions and Refunds:

Without a valid PAN, TDS deductions are often subject to higher rates, resulting in a larger sum being held up in transactions. The credit and refund process for such TDS amounts becomes impossible without the inclusion of PAN.

Application for Lower Tax Deduction:

Applications for lower tax deduction cannot be filed without a valid PAN. This means that NRIs may miss out on potential tax benefits if PAN is not provided.

In summary, having a PAN is not just a legal requirement but a practical necessity for NRIs conducting financial affairs in India. It ensures compliance with tax regulations, facilitates smoother transactions, and allows for the efficient management of tax-related processes. Obtaining and maintaining a PAN is a fundamental step for NRIs to navigate the financial landscape in India seamlessly.

NRIeCA’s Expert Assistance

Our expert team at NRIeCA provides seamless assistance in obtaining PAN in India. We ensure the preparation of PAN applications with the correct legal status of the applicant, examination of acceptable supporting documents, submission of applications, and secure allotment and delivery of PAN to NRIs.

For personalized and hassle-free PAN services, contact NRIeCA today.

Note: The information provided is a general guide and should not be considered as legal advice. Consultation with tax professionals is recommended for specific cases.