PAN

Is it mandatory for resident individual to have PAN for sending outward remittance under the scheme?

Ans. Yes, it is mandatory to provide valid PAN to the Bank.

What is PAN?

Ans. PAN is a ten-digit alphanumeric unique identifier, issued by Income Tax Department of India. PAN is mandatory for transacting in financial markets in India.

What procedure should be followed to apply for the PAN?

Ans. Application for PAN can be made online in the prescribed Form along with required proof of identity and address and a passport size photograph. Also, in case of NRIs, there are few additional requirements of getting the documents properly attested by the Indian Embassy/Consulate/High Commission/Apostille.

An NRI has income from various sources in India, which yield an annual income of Rs. 5lacs. Are there any adverse consequences of not holding a PAN?

Ans. In case ofan NRI who does not hold PAN in India, his incomes will be subject to TDS at highest of the following rates:

(a)
20% or

(b)
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.

In view of above income earned by the NRI in spite of being eligible to be taxed under special rate will be liable for tax deduction @ 20% (if higher of the two parameters) on account of non-availability of PAN. Hence, it is advisable for the NRI to obtain PAN.

What if an NRI has already obtained a PAN but has income below the prescribed taxable limit. Is it mandatory for him to file ROI?

Ans. It is not mandatory to file income tax return if PAN is obtained. Hence, an NRI earning income below the taxable limit is not required to file his ROI.