A Permanent Account Number (PAN) is a 10-character alphanumeric code issued by the Indian Income Tax Department to all taxable entities. It is a must-have for anyone who earns an income in India, regardless of whether they are an Indian national or a Non-Resident Indian (NRI).
As an NRI, it’s important to understand the process of applying for a PAN card and the documents you’ll need to do so. Here is a comprehensive guide that will help you apply for a PAN card easily.
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Can NRI apply for e PAN card?
Yes, Non-Resident Indians (NRIs) can apply for an e PAN card. To do so, they must submit the Form No. 49A along with the requisite documents and prescribed fees at the PAN application center of UTIITSL or Protean (formerly NSDL eGov).
Alternatively, they can make an online application through the website of UTIITSL or Protean (formerly NSDL eGov).
The documents required to be submitted along with the PAN application form include a copy of passport as proof of identity, and a copy of bank account statement in country of residence, copy of NRE bank account statement, or copy of passport as proof of address.
The fee for processing of PAN is Rs. 107 if the communication address is within India, and Rs. 994 (Application fees +dispatch charges) if the communication address is outside India.
Does an NRI need a PAN card?
Yes, an NRI needs a PAN card in certain scenarios. A PAN card is mandatory for an NRI if they have a taxable income in India, wish to trade in shares through depository or broker, or want to invest in Mutual Funds.
An NRI can apply for a PAN card from the USA online. The easiest and most convenient way to apply for a PAN card from the USA is online. NRIs who hold Indian citizenship and settled abroad should use the Form 49A available for Indian citizens.
Whereas NRIs 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 fill Form 49AA.
PAN Card is also mandatory for an NRI if the NRI would like to invest in Mutual Funds, open a bank account, open demat account, purchase motor vehicles except two wheelers, open NRE, NRO or FCNR account, open NRI Demat account with a depository, participant, custodian of securities, etc., or purchase mutual fund units costing more than Rs. 50,000.
In addition, a PAN card is necessary for filing income tax returns if they have rented out the property, or if the property is sold later, the capital gains resulting from the sales would be subject to capital gains tax.
Capital gains would be included in the total income while it is being taxed.
The application process for an NRI PAN card is the same as for residents.
The only difference is an NRI applicant needs to submit the Form No. 49A and required documents including overseas address proof to apply for a PAN card. Applicants can get their NRI PAN card at their provided address within 15 days of application.
How can I change my resident PAN to NRI PAN?
Changing your resident PAN to an NRI PAN is a relatively simple process. To begin, you will need to visit the NSDL online website and apply for a change in PAN details. You will then need to submit the changes required and opt for Pan Card delivery (over email or in Physical Form).
There are fees associated with this process, depending on the form of delivery you choose.
For physical delivery to an Indian address, the fee is Rs.101/-, while for overseas delivery it is Rs.1,011/-. For e-Pan Cards, the fee is Rs.66/-.
In addition to the fees, you will also need to provide proof of the changes required.
This includes copies of documents such as your passport, OCI card, bank account statement in the country of residence, NRE Bank Account Statement in India, and Residential Permit.
Once these documents have been uploaded and validated, the application process can be completed.
It typically takes about one month to receive the card, which is sent by registered India Post. Within 15 working days of receiving your coupon number, the actual card will be delivered to your address.
If you have a PAN Card and later become an NRI/OCI, it is advisable that you continue using the same PAN Card. Alternatively, it is easier to just update your KYC in banks and for your investments.
Is it mandatory to link PAN card with Aadhaar for NRI?
It is not mandatory for NRIs to link their PAN card with Aadhaar. According to Section 139AA (1) of the Income Tax Act, 1961, NRIs, foreign citizens, super senior citizens, and individuals from Assam, Jammu and Kashmir, and Meghalaya are exempt from the requirement of linking their PAN card with Aadhaar.
However, if an NRI is eligible to obtain an Aadhaar Card, they must link it with their PAN Card before the prescribed due date, which has been extended to March 31, 2023.
Failure to link the two cards may result in a penalty of up to Rs. 10,000 according to the Income Tax Act. I
n addition, if the two cards are not linked by March 31, 2023, the PAN Card may become inoperable.
If the PAN Card is entered for a tax return, it will show as invalid. However, any transactions conducted before the inoperative phase will remain valid.
NRIs can enroll for an Aadhar Card if they want to but it isn’t mandatory for them to do so.
In 2019, the government removed the 182 days waiting period for NRIs. They can apply for an Aadhar Card when they come to India without any waiting period with an Indian Passport.