A Permanent Account Number (PAN) Card is a very important document for Non-Resident Indians (NRIs) who carry out financial transactions or investments in India. It is given by the Income Tax Department of India and must be obtained for taxation purposes, banking, and investment. Although NRIs are not liable to pay tax in India on their worldwide income, they must obtain a PAN card for financial operations in India.
Reasons Why NRIs Require a PAN Card
- Filing of Income Tax: If an NRI earns income taxable in India (salary, rent, capital gains, etc.), a PAN card is required to file income tax returns.
- Investment in India: NRIs making investment in mutual funds, stocks, or bonds require a PAN card under SEBI rules. It is required for opening a Demat and trading account with Indian stock brokers.
- Property Transactions: A PAN card is necessary to purchase, sell, or lease property in India, so that the tax deductions on rental income or capital gains can be made properly.
- Opening an NRI Bank Account: Although some banks do not require a PAN card to open an NRE/NRO account, it is necessary for financial transactions such as fixed deposits and remittances.
- Business & Entrepreneurship: NRIs who intend to start a business or invest in an Indian company need to have a PAN card for tax purposes and registrations.
