A unique alphanumeric identity which is allotted to each taxpayer is the Permanent Account Number (PAN). It is a 10 digit no. which is provided by the Central Board of Direct Taxes. Presently it is one of the most important documents which acts as financial identity proof for each of monetary transactions. Whether you have to buy a car or invest in property fill income tax return PAN has become mandatory.

Main Aim – It gives a key to track the financial transactions which being above the taxable limits is not evaded by the individuals. Added benefit is that PAN No. remains unaffected even if you change your address throughout the country.

Similarity in PAN Card No. and SSN No.  The social security no. given to citizens U.S.A. and Pan No. issued to Indian citizens are identification codes which are personal and help the government in maintaining and tracking records. A non-resident Indian (NRI) or a person of Indian origin (PIO), you can apply for PAN (Permanent Account Number). As an NRI who needs to invest in India should furnish a PAN No. It is an important no. for trading and banking circuits in India.

Why do NRIs need PAN?

For NRIs, PAN is necessary to conduct transactions in India. To invest in stocks, the mention of this number is mandatory for Indian residents and non resident Indians alike. NRIs are required to pay tax on income generated from their investments in India. All such information is routed through the PAN.[1]

Importance –

IT Returns Filing: All individuals and who are eligible for Income tax i.e. the persons having salary above 2.5 lakhs are expected to file their IT returns..

Opening a bank account: A PAN card is required in order to open a new bank account, whether it is a savings or a current account. All banks, whether public, private or co-operative, require the submission of a PAN card in order to open an account with them.

Baking investments: For investing in securities, furnishing your PAN details for any transactions amounting to above Rs. 50, 000 is mandatory. This extends to equities, mutual funds, bonds as well as debentures.

Foreign Exchange: For conversion of the Indian currency into foreign currency, requirement of details of the PAN at the money exchange bureau/bank/institution is necessary.

Property: Buying, selling or renting property in India now requires PAN card proof. In the case of buying of property, the PAN details of the buyer as well as the seller have to be listed on the sales deed and any other such documentation for the sale to be complete.[2]

[1] http://www.pancardfornri.com/2012/05/how-to-get-pan-card-in-usa-united.html last accessed on 7th August 2017

[2] https://www.bankbazaar.com/pan-card/uses-of-pan-card.html last accessed on 7th August 2017