PAN made easy for NRIs

Non Resident Indians (NRIs), just like other resident investors, require a PAN for several purposes like operating a demat account, making mutual fund investments, etc.

Other sources of income such as interest from NRO accounts, capital gains, rent etc are subject to TDS at the highest rate and a refund can only be sought by filing a tax return. Again, a PAN is mandatory for filing such returns.

But obtaining a PAN was never easy for NRIs. Besides several other requirements, a proof of the following is also needed:

i. his own identity
ii. address in India as well as abroad
iii. designation and code of the concerned Assessing Officer of Income Tax Department
iv. details of a Representative Assessee

Of the above, the last mentioned was particularly onerous. This is because, Section 161 of the Income Tax Act specifies that every Representative Assessee shall be subject to the same duties, responsibilities and liabilities as the NRI. And if the NRI who is being represented fails to pay his tax dues, such tax shall be levied upon and recovered from him ie the representative assessee.

This meant that ipso facto, the Representative Assessee was responsible for the NRI’s actions, obligations and liabilities.

This effectively meant that those NRIs who did not have a person in India who was ready to take on the heavy responsibility of being his Representative Assessee, were not in a position to invest in the stock market.

CBDT clarification

After several representations made by NRIs and PIOs in this regard, The Directorate of Income Tax (Systems) vide PAN Circular No 4 dated October 11, 2006 has now issued guidelines to its service providers (UTITSL and NSDL) facilitating NRIs to obtain a PAN without having to provide for a Representative Assessee.

Now, the PAN card may be issued based on the copy of the NRI’s passport as ID proof and copy of passport/copy of bank account in the country of residence as the requisite address proof.

As per the new guidelines, an applicant who is:

a) A citizen of India but residing outside India at the time of making the application; or
b) A foreign citizen; or
c) A person other than an individual (like company or trust or firm etc) having no office of its own in India

should fill the PAN application



1. AO Code pertaining to International Taxation Directorate should be used. UTITSL and NSDL will provide on their web sites the codes of International Taxation Directorate and advise the applicants to mention the specific AO code out of these codes.

2. Individuals may indicate any address (residential or office, whether Indian or foreign) as the address for communication. A foreign address can be provided if they do not have any Indian address of their own. Such applicants must also provide an email-id for communication.

3. Additional courier charges for PAN card dispatch shall be payable by applicant at the time of making application if the address for communication is a foreign address.

4. Providing details of Representative Assessee is not mandatory for such applicants.

5. Individual applicants should provide their own recent colour photograph of prescribed size. This is not applicable for other applicants.

6. The application should always be signed by an individual and in the case of non-individuals by an authorized signatory (e.g. director of the company or partner of the firm or trustee of the trust, etc.)

7. The application should be submitted along with the appropriate documents in support of identity and address of the applicant. For individuals, the main document necessary is a copy of the passport. If the applicant has a bank account in India, a copy or the bank passbook may be provided as a proof of local address. Where the foreign address is not available in the passport, a copy of bank account statement in country of residence will suffice the purpose.

A foreign citizen who at the time of application for PAN is located outside India should get the copies attested by the Indian embassy in the country where the applicant is located.

For other applicants, a copy of registration certificate of their country duly attested by the Indian Embassy in the country where applicant is located is necessary.

SEBI has also specified that the all NRIs and PIOs are required to comply with the mandatory requirement of PAN on or before December 31, 2006, failing which their demat accounts shall be made inoperable.

For more details, visit http://tin.nsdl.com. Investors are urged to apply and obtain the PAN at the earliest, as it doesn’t seem probable that the authorities may extend the date further.