How to Get a PAN Card for an NRI
Are you a Non-Resident Indian (NRI) who earns an income from India? Do you perhaps want to buy physical shares in India or apply for a passport or visa? Or do you perhaps need to send money to your family? Before you can do any of these you’ll need a PAN card for NRI.
Let’s take a look at what this is.
What is an NRI?
So let’s first study the term Non-Resident Indian. Before we get to the requirements we need to lay a bit of a foundation. The Indian government has decided their tax year starts every year on April 1st and ends in the following year on March 31st. All Indian residents file their tax returns based on their taxable income for that tax year.
Someone who lives in India for more than 182 days in a specific tax year is considered an Indian resident and needs to file a tax return to the Indian Department of Revenue. That is if you earn a level of income that is subject to taxation. Most governments have laws that place their citizens and residents under the obligation to pay tax. The Indian government also has similar laws which require the same.
Now, there are many circumstances or reasons why you could be considered an NRI. But in the end, it comes down to a simple principle. Are you an Indian citizen who spent more than 182 days outside the borders of India within a specific tax year? If so, you are an NRI for that tax year.
This most probably means your income earned abroad can’t be taxed in India. If this is the case chances are high you’ll need to file your taxes in the country where you spent more than 182 days for that tax year. Contact an international tax specialist or a registered accountant in India and ask their advice regarding NRI tax.
So, to summarise someone with Indian citizenship who spends more than 182 days outside India is an NRI. If this is you, you should definitely consider the importance of getting a PAN card for NRI.
What is a PAN Card?
We’ve got the term NRI down, but what exactly is a PAN card? The Indian government instituted the Income Tax Act in 1961. Through this law, high-net-worth individuals (HNWI) are required to own an all India Permanent Account Number (PAN). The Central Board of Direct Taxes (CBDT) supervises this process. A PAN card for NRI helps the government to track specific things which are of high importance to them.
A PAN card for NRI resembles a credit card. It is roughly the same size and it’s made from a plastic-like material. This makes it easy to transport since it can fit snugly into your wallet. But why do you as an NRI need a PAN card?
Why Do NRIs Need PAN Cards?
The Indian government needs to regulate many of your financial and immigration activities. They require Indian citizens who want to engage in these activities to have a PAN card. This helps them to track it with greater ease and precision. So unlike NRI education loans in the U.S., you’ll need a PAN card to gain access to certain financial services back home.
By law you need a PAN card to engage with the following activities even if you are an NRI:
- Receive a taxable income in India – A salary or professional fees also counts as a taxable income.
- Opening a bank account.
- Opening a Demat account – You keep the electronic share certificates proving you are a shareholder in a public company in a Demat account.
- Applying for a credit or debit card.
- Investing in Mutual Funds – NRI investment in India requires a PAN card.
- To sell or purchase property or assets.
- Applying for a loan – like applying for a home loan for an NRI.
- Applying for a passport or visa.
- Applying for foreign remittance – Sending money to your family back home in India.
- Deposit or withdraw amounts exceeding 50,000 Indian Rupees.
- To trade in the Indian stock market – The Securities and Exchange Board of India (SEBI) requires you to have a PAN card before you are eligible to trade Indian stocks.
Clearly, there are quite a few activities which require a PAN card for NRI. Non-Resident Indians who send money to their Indian relatives are some of the most common situations which require a PAN card.
How to Apply for a PAN Card for NRI
Applying for a PAN card is almost like applying for an NRI personal loan. People who live in India can apply at the PAN agency within their district for their card. But you are an NRI. You need a different way to get it done.
These instructions will help you to apply for a PAN card even when you are abroad:
- Submit your online PAN card application – Follow the link and submit your Form 49AA.
- Receive your unique 15-digit acknowledgment number – This number acknowledges your application. Save it and use it as your reference number in future inquiries about your PAN card application.
- Make a copy of the printout – Make a copy of the print out that acknowledges your application. Sign it and attach two passport-style photos in the space provided. Your signature is necessary to verify future transactions and activities performed by your PAN card.
- Attach the required documents and mail it – Attach proof of identity and proof of address to the print out package with the passport photos and mail it to the address below.
Income Tax PAN Services Unit, NSDL e-Governance Infrastructure Limited, 5th floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune 411016
Please superscribe the envelope with “APPLICATION FOR PAN” and add your acknowledgment number. For example, “APPLICATION FOR PAN – 123456789101123”
PAN Card for NRI Fees
Unlike certain NRI car loans, a PAN card application requires a fee. The processing fee is 105 Indian Rupees. It will cost you 971 Indian Rupees if the address from which you apply is abroad. You can pay via online methods accepted by the Indian Income Tax Department. These methods include credit card, debit card, and electronic funds transfer. Follow the instructions and print the payment receipt so that you can offer it as proof of payment for future reference.
Your PAN card will be processed and mailed to you via Indian postage as soon as payment is cleared. It can take a few months to be completed depending on how busy they are. Complete the form correctly and add all required documents to prevent your application from being rejected. It may also take an extra few weeks for your card to arrive in the mail. Please note, extra courier charges may be incurred for your account if you require them to mail the card to your address outside of India.
Non-Resident Indians are living all across the world. But that doesn’t exclude you from Indian laws and regulations. NRI’s who regularly trade in the Indian economy or who simply send money to their relatives back home are required to have a PAN card.
Follow the instructions above to get your PAN card for NRI. Apply today to be eligible to take part in your home country’s economy.