What is a Permanent Account Number (PAN)?

Similar to the social security number issued to all US citizens, the pan number has to be quoted by all Indian nationals for all financial transactions, tax and investment purposes. Primarily, it was brought about to bring all accounted money and incomes under the income tax assessment net. It has become vital for those of Indian origin residing in the US and other nations and wanting to make investments in India.

It has become imperative for some people of Indian origin wanting to invest in India as mostly they prefer other destinations with higher interest rates in India. Compared to the US, Indian interest rates are 5% more. But they all need to get a PAN card first before investing in India. For getting a PAN number and card, you need not have to come to India even though it is a primary form of identification these days in India.

You cannot invest or even open a bank account in India without quoting your PAN number. Even citizens of foreign countries can obtain PAN cards. For application, you would need to fill out the application form with two passport size snap shots and proof of address along with the fees. Providing your bank statement is the easiest way to prove your address, verified and attested by the Indian embassy near where you are located.

Over the years, the application procedure for PAN cards has been simplified to make it easier for people to invest in India.

Uses of a PAN Card?

As per the IT department of India it is now compulsory to quote a permanent account number on all kinds of financial and investment related transactions in India and on an applicant's tax forms (tax filing applications, etc). One can also think of it as an Indian ID proof and it is required to mention a PAN if you need to open a Demat Account, do stock investment, convert stocks into dmat form, purchase real estate, open a bank account, get any kind of loan, apply for visas and passport, enjoy your rental income, get foreign remittance from abroad, etc.

Is it Necessary for NRIs to have a PAN Card?

PAN Number is compulsory as per the Income Tax department of India, and also now the SEBI made it mandatory for the investors to mention their permanenet account number in all their investing activities in India.