Connecting Businesses with Opportunities in India
Connecting Businesses with Opportunities in India

PAN Card for NRIs and for Foreign Companies that are doing Business in India

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

Background

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

Comments

PAN NUMBER HAVING FT001 represents for?

Dear Sir,

 

I need a clarification towards the companies or manufacturers who are dealing with exports or imports having a 15 digit PAN Number..

 

Kindly clarify the last 5 letter with number represents for what

Ex:

AAACB5723AFT001

 

     
Pan card for overseas company intend to do business in India

Hi,

One of my acquantance who owns a company overseas want to do some buisness in India. He was told that Pan card is required. Could you please explain in detail and also the expenses required along with what are the documents needed. If you are hired to do this formality, how much do you charge.

 

Thanks

BK

     
Foreign Company

A foreign company has secured a supply and erection contract in JV with an Indian Company from Indian PSU. The Indian company is leader of JV. The foreign companies role is limited to supply material from foreign country. Part Payment is to be released throguh LC. Indian PSU wants to deduct TDS @ 20% from supply payment. For the same Foreign Taxation  TDS department at Minto road wants the foreign company to get a PAN number and apply in Form 13 u/s 197 for exemption of tax. Is it correct route or are we falling in a trap?

     
PAN for someone in foreign company

I am a foreingn company with income from India.

Company has a PAN. The comapny has no presence in India, no office, no representative, nothing.

Does someone, say Director, in the company must have a PAN to pay tax return for the company?

Can the company pay tax return in India without anyone in the company having a PAN?

Thanks in advance.

     
Cash needs to be deposited in to a foreign national's account

Dear Sir,

One of my friend who is a Italian national came to India for studies & holding a student visa. He has opened a bank account with India , but bank officials are not allowing to deposit the cash in to his account stating that cash deposits are not permissible credits according to RBI guidelines. The college which he took admission has refunded some amount as cash for excess fees payment.

We have tried to get the RBI guidelines but unable to find any guidelines which is resricting a forieng national to deposit cash in to bank accounts. Need your kind guidance & advice in this matter .

Regards Jay   

     
NRE/ NRO accounts

Dear Shashi,

Greetings!

So does it mean all NRIs having existing NRE / NRO accounts in India should apply for PAN? + Do they need to apply for PAN when there NRE deposits come up for renewal - the interest on NRE deposits are not liable to tax - so what is the idea behind it?

regards

     
Hello, We are foreign company

Hello,

We are foreign company (the Consultant) providing consulting services to the Indian company (the Client). All the services are performed out of India, no one from our company presents in India. We don't have PAN. We are told by the Client that they are to withhold 20% from payment for our consulting services. If we would like to have reduced to 10% withholding tax, we are to register with the Indian tax authorities and to obtain PAN.

Is it right for the case we do not present in India? If we are registered in India and have PAN, do we have any filing or other requirements?

Thank you in advance!!

Best regards,

Vitaly

     
Any update on this?
We are faced with the same problem. I am curious what you discovered.
     
PAN card for NRI for purchase of jewellery

NRI purchasing jewellery from a jeweller he does not have a pan card and paying the amount through local bank

what is need to be done from seller point of view. TCS TDS applicability documents to be collected from the NRI

     
weather PAN is required or not

weather PAN is required or not in case  transfer of share by nr

     

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