Change in PAN Card application process : Original Identity proof, address proof and BIRTH CERTIFICATE REQUIRED henceforth

Below is the Press Release for change in procedure for PAN Application. However, I recently visited NSDL i.e. PAN Facilitation Centre on 25.01.2014, where no such guidelines or instructions are yet received to them. On asking about PAN Card application for NRIs, or non-residents, still the same answer. In my opinion, originals will just not be possible to be shown in Indian PAN Facilitation Centres, however again an attestation by Indian Embassy/High Commission / Consulate should suffice. I have concerns for Indian residents who have shifted their base to foreign countries and who might not have their Birth Certificates at all, or they have misplaced or kept the originals here in India. Only time will tell whether Tax Department makes it easy or difficult for the taxpayers.

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

Dated 24th January, 2013

Press Release

The procedure for PAN allotment process will undergo a change w.e.f. 03.02.2014. From this date onwards, every PAN applicant has to submit self-attested copies of Proof of Identity (POI), Proof of Address (POA) and Date of Birth (DOB) documents and also produce original documents of such POI/POA/DOB documents, for verification at the counter of PAN Facilitation Centres. 

The copies of Proof of Identity (POI), Proof of Address (POA) and Date of Birth (DOB) documents attached with PAN application form, will be verified vis a vis their original documents at the time of submission of PAN application at PAN Facilitation Centre. Original documents shall not be retained by the PAN Facilitation Centres and will be returned back to the applicant after verification.
 

(Rekha Shukla)
Commissioner of Income Tax (M&TP)
Official Spokesperson, CBDT

Why do NRIs need PAN??

An NRI needs to obtain a PAN (Permanent Account Number) under certain following situations : 

 

Firstly, when an NRI is liable to file income-tax returns in India in case his taxable income in India is above the threshold limit, which is not chargeable to tax, or for claiming a refund of taxes paid or withheld, or for claiming a carry forward of loss, he needs a PAN which is mandatorily required to be quoted at the time of filing income-tax returns.

 

The threshold limit (minimum amount not chargeable to tax) which is not chargeable to tax is Rs.2 lacs for the FY 2013-14. (April 2013 to March 14)

 

Secondly, it is also mandatory to have a PAN for the purpose of entering into certain specified financial transactions such as transactions of an amount of Rs.50,000 or more for : 

Purchase of units of mutual funds,

Acquiring/Investing in shares, debentures or bonds of a company, 

Payment of life insurance premium, 

Opening a demat account, opening a bank account and having a broking account etc.

 

 Whenever an NRI has any income on which tax is required to be deducted at source, it is mandatory to furnish the PAN to the deductor, failing which the deductor will deduct tax at source at the higher of the rate prescribed under the Double Tax Avoidance Agreement, or the Income-tax Act or at 20%. 

 

Hence, if the prescribed rate either as per the Indian Income-tax Act or as per the Double Tax Avoidance Agreement is say 10%, in the absence of PAN, the tax will be deducted at 20%.

 

It is also compulsory to quote PAN in all documents pertaining to the following financial transactions :-
(a) sale or purchase of any immovable property valued at five lakh rupees or more;
(b) sale or purchase of a motor vehicle or vehicle, [the sale or purchase of a motor vehicle or vehicle does not include two wheeled vehicles, inclusive of any detachable side-car having an extra wheel, attached to the motor vehicle;]
(c) a time deposit, exceeding fifty thousand rupees, with a banking company ;
(d) a deposit, exceeding fifty thousand rupees, in any account with Post Office Savings Bank;
(e) a contract of a value exceeding one lakh rupees for sale or purchase of securities;
(f) opening a bank account;
(g) making an application for installation of a telephone connection (including a cellular telephone connection);
(h) payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time ;
(i) payment in cash for purchase of bank drafts or pay orders or banker’s cheques for an amount aggregating fifty thousand rupees or more during any one day;
(j) deposit in cash aggregating fifty thousand rupees or more with a bank during any one day;
(k) payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time.