In the past, PAN card was only required for filling tax returns. Over the years, the importance of Pan card has significantly grown and it has become an essential proof of Identity in India. In the beginning the use of PAN card was limited to opening a bank account, trading in the Indian stock market and buying or selling of properties. With the span of time, the use of PAN card has spread into unconventional areas such as paying a hotel bill, making an application for telephone connection, signing a rental agreement to making a high value purchase at a jewelry shop.
First let’s understand what is a Pan Card?
Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department, to any “person” or “company” who applies for it or to whom the department allots the number with an application.
Why your bank is asking to furnish a PAN card number?
Section 139A (5B) of the Indian income tax act requires banks in India to mandatory quote the permanent account number (PAN) in the TDS certificate.
Central Board of Direct tax has sent a circular on May 13, 2011, stating that from the financial year 2011-2012, all Forms 16A will be generated online and address of delivery will be captured on the address on your PAN card application form. If you don’t have a PAN Card, it could result in the following:
- Non receipt of Form 16A
- Non Issuance of Form 16A
Also, with the introduction of Section 206AA (w.e.f 1st April 2010), In case if any person is not holding the PAN Card, the rate at which the Tax be deducted shall be higher of 20% or Rate of TDS actually to be deducted i.e. 10% (DTAA rate for Interest Income in certain countries) or 15% (certain Short Term Capital Gains) or 30% (other Incomes) etc.
From the point of view of Non-Resident Indians:
PIOs and OCIs, these areas are not on the priority when it comes to applying for a NRI Pan card. Most of the NRIs/PIOs/OCIs have bank accounts in India and their banks have asked them to furnish their pan card number for various reasons. We come across various customers who don’t even know what pan card is and why they need one?
Is there any other benefit of having a NRI Pan Card?
If you are planning to repatriate funds from your NRI account to your local account in the any Overseas bank Account or you have inherited some assets on which you need to pay tax, you are required to quote your pan card number. This Pan Card number will be furnished on the 15cb/15ca form issued by a charted accountant in India.
Also check out our FAQ on NRI Pan card to clarify your doubts.
Apply your NRI Pan card in simple three steps, without any hassle of getting a rupee draft or sending documents to India and we will take care of everything for you.
