Top 10 Benefits of Having a PAN Card for NRIs

A PAN (Permanent Account Number) is a unique 10-digit alphanumeric identifier issued by the Income Tax Department of India. It is a mandatory document required for various purposes, like opening bank accounts, filing tax returns, investing in mutual funds, selling or purchasing properties, etc. 

An NRI needs a PAN card if they have income sources in India, like capital gains, dividends, rent, or other investments. It is also required to open an NRE or NRO account in India. While having a PAN card is not mandatory for NRIs who have no Indian income or transactions, it's an important financial identifier that avoids any complications and higher tax rates.

Having a PAN card is also important to conduct high-value transactions, file income tax returns, and invest in the Indian stock market. Keep reading the blog to know more about why an NRI needs a PAN card even after living abroad and the benefits of having an NRI PAN card. 

What is a PAN Card?

PAN (Permanent Account Number) is a vital identification document issued by the Income Tax Department to all taxpayers, including NRIs. It is a 10-digit alphanumeric code that records all tax-related information of an individual and entity. 

The PAN contains various important information, like name, parents' name, birth date, PAN number, signature, and photograph. The key purpose of a PAN card is to serve as a universal identifier to track all financial transactions, helping in preventing tax evasion.

Additionally, it also serves as an essential document for conducting financial transactions, filing ITR (Income Tax Returns), making high-value purchases and sales, etc. Each PAN is unique to its holder and remains valid for a lifetime. 

What are the Top 10 Benefits of Having an NRI PAN Card?

A PAN card offers several benefits to the cardholder and serves as a very important identifier, especially for cross-border investments, property ownership, and financial compliance. Here are the top 10 benefits of having an NRI PAN card:

1. Purchasing or Selling a Vehicle 

NRIs purchasing or selling a vehicle in India, whether for personal use or for family needs, require a PAN card to complete registration or transfer formalities. This is to ensure adherence to financial regulations and ownership validation. 

2. Boosts the Credibility of Businesses and Freelancers 

PAN helps in improving confidence in front of the clients to receive likes of freelancers, startups, and small businesses when used on the invoice for quotation purposes. It shows legitimacy, improves client trust, and ensures compliance with the tax regulations. 

Additionally, businesses that are registered under a PAN card can easily open current accounts, make business-related payments, and apply for GST. 

3. Ease Bank Account Opening Process 

Several Indian banks mandate a PAN card to open NRO or NRE accounts. If you try to open a bank account without a PAN, you might not be provided with the service. 

It is mandated to ensure transparency in monetary transactions, which is also applicable to digital wallets and payment platforms. 

4. Simplifies Loan Approvals 

Your PAN number serves as an important document for many types of loans, like personal, vehicle, or home loans offered by banks and NBFCs. It is because the PAN card acts as an identity link between the credit history and the income profile, making the approval process quick and reliable. 

5. Credit/Debit Card Application 

Verification of your income and financial credibility is done by the financial institutions before they grant you a debit/credit card. This verification is conducted based on your PAN, which reduces the risk of default by the customer and promotes transparency. 

6. Universal Proof of Identity 

The PAN card is considered a valid proof of identity throughout India. Since a PAN card records all the important information, such as picture, name, and birth date, it is widely accepted by banks, governments, departments, and private institutions. Additionally, it is compatible for various verification purposes in KYC. 

7. Required for High-Value Transactions 

You must have a PAN card if you are purchasing/selling a property of a value exceeding Rs 10 lakh, or making high-value fixed deposits. The reason behind this is that the government uses the PAN card to monitor large and legitimate money transactions 

8. Making Investments in Mutual Funds and the Stock Market 

You are not allowed to invest in stocks, mutual funds, or bonds without a PAN card. The main purpose of this is to stay updated with the portfolio for future taxation and legal issues. 

9. Prevent Identity Duplication and Fraud 

Since every PAN card has a unique number, it keeps track of only one identity per name. Hence, fraudsters can't manipulate identity for illegal activities. 

10. Helps in Tracking the Tax Payments and Refunds 

The PAN card acts as the main reference number for all taxation activities. The card ensures everything is recorded under a single identifier when NRIs file their returns, pay TDS, or request refunds. It helps in reducing mistakes, avoiding double taxation issues, and improving clarity for both the taxpayer and the Income Tax Department. 

Final Thoughts 

A PAN card is an important document for every taxpayer, including NRIs, to engage in financial activities in India. Although not mandatory for all NRIs, having a PAN card can simplify processes and ensure legal and tax compliance. An NRI seeking to manage, invest, or generate income from assets in India may require a PAN card for all financial transactions. 

Furthermore, if you have any questions regarding the NRI PAN card, connect with our experts. We at SaveTaxs specialize in helping NRIs manage their financial needs and tax obligations. Our team of experts carries years of experience and knows cross-border taxation and compliance issues. Contact us right away and avoid any delays and rejections that are commonly experienced when manually filing government forms.