It is mandatory for all Indian citizens to have a permanent account number and to pay tax under Income Tax Act, 1961. NRIs holding bank accounts in India already pay tax in the form of TDS that is deducted by banks from your bank accounts. No tax returns need to be filed for this type of income. However in many cases it may be advantageous for some NRIs to file a tax return and claim part or most of the tax that is deducted from your Indian bank accounts.
PAN stands for Permanent Account Number (PAN) which consists of 10 digits alphanumeric number issued by the Income Tax Authority of India in the form of a laminated card. The National Securities Depository Limited (NSDL) has also been engaged to allot PAN cards from TIN facilitation centers.
Why do NRIs need PAN card?
It is mandatory to submit PAN in all financial related transactions carried out in India and on tax returns. It serves as an Indian ID proof and is required for Demat account opening, buying real estate, stock investment, to get loan, while applying for visa or passport, rental income, etc.
How to apply for PAN?
Certain documents are required while applying for PAN. Those include:
- Identity and residence proof
- Colored photographs
- Code of the concerned Assessing Officer of the IT Department obtainable from the IT office where form is submitted