Connecting Businesses with Opportunities in India


Submitted by Shashi Mohan on Tue, 11/17/2015 - 10:02pm.


PAN Card or Permanent Account Number is a MUST for both a Non-Resident Indian (NRI) and a Non-Resident organization in case they receive income and need to file income tax return in India. Indian Income Tax Authority keeps a track and consolidates financial transactions through PAN and it is regarded as a Tax Registration Number in India. Legislation has accordingly mandated to quote PAN at several financial transactions. As a practice, requirement of PAN is also considered mandatory in non-financial activities such as opening a Bank Account or becoming a “Director” (getting Director Identification Number) in a company registered in India.

Now days, it works as an Identity card in India. Similar to an EIN or Social Security Number in USA, a PAN in India is a 10 digit alphanumeric number issued by Income Tax Department.  It’s a unique number issued for lifetime. In certain cases, it can also be surrendered or cancelled under a valid reason. Having more than one PAN is not permitted and one can be penalized for having more than 1 PAN.

What makes PAN card a Mandatory requirement?

There are specific transactions which cannot be carried out unless valid Pan is presented. Relevant authorities simply deny such transactions in absence of a PAN. Below are a few examples:

  • Opening a Bank Account, getting a Credit Card, apply for a Loan
  • Getting a Digital Signature of obtaining a Director Identification Number (for being appointed as a Director in Indian Companies).
  • Insurance Payment, Other Financial transactions > INR 50,000
  • Transaction in Property, Vehicles >INR 500,000
  • Investment in Shares, Mutual  Fund
  • Utility connections (Telephone, Electricity, Gas etc)
  • Domestic registrations such as Service Tax, Value Added Tax, Import Export Code

NRIs and Foreign Companies that are doing business in India also need a PAN

Every recipient of income from India needs to furnish PAN. It is also required that in the absence of PAN, the tax withholding rate will be higher (20%) even if a lower rate is prescribed in Double Taxation Avoidance Agreement (DTAA) with that particular country. The following are the sample cases in which PAN is required by NRIs and foreign companies doing business in India.

  • Carry out financial or investment related transactions
  • Employment or rendering of professional services
  • Trading in Shares through a Depository or even a Broker
  • Invest in Mutual Funds
  • Purchase Land (not Trading) or some property in India
  • Being appointed as a Director in Indian Companies
  • Being appointed as a “Authorised Representative” in a Liaison Office, Branch Office, Project Office
Submitted by Reena Kaushik on Thu, 09/24/2015 - 8:18pm.

With the dollar surging against the Indian rupee, NRIs are taking advantage of the depreciating rupee by sending money to India. The surge in money sent to India increased to 48% in the first four months of this financial year –according to The Economic Times.

Non-Resident Indians are stashing away more to remit home in order to take advantage of the weakening rupee and the eight- to nine-percent interest rate on domestic deposit in India. Remittances are also fueling the real-estate market, as real-estate is viewed as long-term investment with a lifetime appreciation.

On the flip side, an appreciating U.S. currency is a worry to the manufacturing sector in India. Exports have become expensive eroding the margins of the sellers.

For the recipients of money sent by NRIs, remittances are a lifeline, and ‘dollars wrapped with care,’ according to Dilip Ratha, Head of KNOMAD (Global Knowledge Partnership on Migration and Development). Funds sent help pay for education, housing, care for the elderly and business investments. In some cases, remittances act as emergency funding for unforeseeable situations, when money is needed the most.  

According to World Bank data, India received remittances worth US $70 billion in 2014 way ahead of China, Philippines and Brazil, and continues to grow as one of the top recipients of remittances among developing nations.

Remittances into India constitute almost 4% of India’s GDP. Money transfer from USA to India constituted almost 12billion dollars and is expected to grow to 15 -20 billion dollars by 2016.

This market has seen the emergence of Fintech disruptors like Transfast, Xoom and Remitly instrumental in reshaping the FX market and helped in lowering the cost of global remittance fee. Established players like Western Union and Moneygram are already feeling the heat from the online disruptors.  With offerings like instant bank deposit, high exchange rates and zero fee transfers, these companies have significantly increased their share of remittance in the online market space.

As long as we see US dollar surge against the INR we will see a surge in money transfers to India, fueling businesses, changing lives and aiding in the growing economy.