India being a country that encourages Foreign Investments, a good number of Foreign Nationals visit India frequently and also wish to start their business ventures here. Apart from capital, premises of business and various other factors, PAN for a Foreigner is essential for smoother operation of business in India
What is a PAN?
PAN stands for “Permanent Account Number”. It is a 10 digit alpha-numeric code generated by the Income Tax Department of India. The tax department has made it mandatory for everyone including NRIs to hold a PAN in order for them to enter into certain types of transactions in India
As per the current Income Tax Rules and regulations read with Income Tax Act, it is mandatory to quote one’s PAN in the following types of transactions.
A. Purchase of Assets
1. Securities
01. Any contract for sale or purchase of securities of a value of exceeding Rs.1 lakh;
02. Making an application to any mutual fund for purchase of its units for an amount of Rs.50,000 or more;
03. Making an application to a company for acquiring shares for an amount of Rs.50,000 or more. However, this provision shall apply only for public issue or right issue and not for purchase through stock broker and from share holder;
04. Making an application to a company or institution for acquiring debentures for an amount of Rs.50,000 or more;
05. Making an application to Reserve Bank of India for acquiring its bonds for an amount of Rs.50,000 or more;
2. Other Assets
01. Sale or purchase of any immovable property valued at Rs.5 lakhs or more;
02. Sale or purchase of motor vehicle or vehicles, as defined sec.2(28) of the Motor Vehicle Act, 1988 (Other than a two-wheeled motor vehicle, whether having any detachable side car having extra wheel attached to such two-wheeled motor car or not);
B. Transaction with Banks / Post Office
01. Opening an account with a banking company;
02. A deposit, exceeding Rs.50,000 in any account with Post Office Saving Bank;
03. A Time deposit with a banking company exceeding Rs.50,000. In case of a minor opening a time deposit account or any other account with a banking company and who does not have any income chargeable to Income-tax, he shall quote the Permanent Account Number of his father or mother or guardian, as the case may be;
04. Cash payment for purchase of bank drafts or pay orders or bankers cheque from a banking company for an amount aggregating Rs.50,000 or more during any one day;
05. Cash deposit aggregating Rs.50,000 or more with a banking company during any one day;
06. Making an application to any bank or banking institution or any company or any institution for issue of a credit card;
C. Other Transactions
01. Making an application for installation of a telephone connection including a cellular phone;
02. Payments to hotels and restaurants against their bills for an amount exceeding Rs.25,000 at any point of time;
03. Cash payment exceeding Rs.25,000 in connection with travel to any foreign country at any point of time;
04. Demat account opening
05. Getting Loan
06. Applying for VISA or Passport
07. Rental Income
08. Foreign Remittance
How to apply for a PAN?
The procedure for applying pan card is simple and the steps are:
– The requisite application form should be filled up and signed in the appropriate place in ‘black ink’ only and within the boxes provided
– A recent, clear passport size photograph of the applicant needs to be affixed on the form
– Proof of identity and address need to be self-attested and attached with the application
– The following documents are to be submitted:
Proof of identity
Copy of any of the following :
– Passport
– Person of Indian Origin (PIO)card issued by Government of India
Proof of address
Copy of any of the following :
- Passport
- Bank statement of account in India
- Residential permit issued by the State Police Authorities
- Registration certificate issued by the Foreigner’s Registration Officer
- Person of Indian Origin (PIO)card issued by government of India
- If the address to which the PAN is to be delivered is outside India, the documents will be required to be attested by the Indian Embassy in the respective country
- On submission of the above and payment of the requisite fee, an acknowledgment slip is given. The acknowledgment number can be used to track the status of the PAN, online
- In case of lost/misplaced PAN, a duplicate can be applied for. However, applying for or holding more than one PAN is an offence punishable with a penalty of Rs.10000/-
For any assistance in applying for a PAN for Resident/Non-Resident Individuals and Companies, please contact us at info@cogzidel.in
