Do NRIs require a PAN Card?

ImDon · #1 1st March 2006, 03:43 PM

Hi,

I have recently opened an account with ICICIDirect.com and started trading in Equities and MFs. My question is being an NRI do I really need to get a PAN Card to get the Tax Deducted at Source or does the bank takes care of it? If Yes whats the easiest way to get it?

Thank You.

srisara · #2 1st March 2006, 04:00 PM

you need a PAN card (NRI) when you want to apply for IPO's in Non-Institutional Categories. Otherwise you can apply under Retail.

Also, any profits are TDS, so there is no need to futher show or pay TDS i believe.

just check google, on PAN card, you'll get the details...

Also find attached file of PAN Card form.

Satya

ImDon · #3 1st March 2006, 04:06 PM

Thanks Satya,

So this means I don't need a PAN Card as long as I don't apply for IPO's in Non-Institutional Categories.

aca_trader · #4 1st March 2006, 06:53 PM

Quote:

Originally Posted by ImDon

Hi,

I have recently opened an account with ICICIDirect.com and started trading in Equities and MFs. My question is being an NRI do I really need to get a PAN Card to get the Tax Deducted at Source or does the bank takes care of it? If Yes whats the easiest way to get it?

Thank You.

Don!

You will need to have the PAN Card. There are numerous provisons of the Income Tax Act, 1961 which may be quoted to support this requirement.

But, here I will just like to talk about a practical problem faced by ICICIDirect while deducting any tax. ICICIDirect will be required to deposit this amount with the IT deptt. quoting your PAN no. Hence, They will ask you to get a PAN card else they will have to pay the penalty for not deducting tax at source or they will have to prove to the IT department that they 'ld not deduct tax as your PAN no. was not available with them. Do you think ICICIDirect will go through this lengthy route?

And if you want to know why PAN card will be a must for you legally, you can ask me once again. Right now, I don't want to bore you & other members with all the technicalities.

BTW Don, Have ya ever worked with any US military establishment?

Best Regards,
--Ashish

ImDon · #5 1st March 2006, 07:01 PM

Hi Ashish,

Thanks for your advice, I'll see to it that I get a PAN as soon as possible. I definately want to know more about why PAN card is a must.

And yeah, I never worked with a US military establishment.

Thanks again for your time.

aca_trader · #6 1st March 2006, 07:28 PM

Quote:

Originally Posted by ImDon

Hi Ashish,

Thanks for your advice, I'll see to it that I get a PAN as soon as possible. I definately want to know more about why PAN card is a must.

And yeah, I never worked with a US military establishment.

Thanks again for your time.

Well, Here is the answer:

Under section 139A of the Income Tax Act, Every person who is required to furnish any return u/s. 139 or whose total income is in excess of the amount chargeable to tax is required to obtain a PAN No.

It means, any person whose total income during the previous year exceeded Rs. 1,00,000 will have to obtain a PAN no. Now, as the income from trading in securities on Indian Stock exchanges has source in India, it's taxable in the hands of every trader irrespective of his residential status.

Assuming that the person in question will have profit in excess of Rs. 1,00,000obtaining a PAN becomes mandatory. Even if a loss is suffered by the person, he can't claim set-off of that loss against profits arising in next year untill he has filed a return of Loss during the previous year.

Hence, it becomes advisable to obtain PAN no. as no return can be filed without quoting the PAN no.

A plain reading of the abovequoted provisons makes it appear that a person who has a positive income in the range of Rs. 1-1,00,000 is not required to get a PAN no.

But here comes section 139(5A) which stipulates that Every person receiving any sum or income or amount from which tax has been deducted under the provisions of Chapter XVIIB, shall intimate his permanent account number to the person responsible for deducting such tax under that Chapter.

Summing up, a PAN no. is required for a person:

1. If he is required to file an ITR.
2. If he has a -ve income and he wants to claim set-off of loss in the future.
3. If he enters into any transaction which are subject to TDS/ TCS (Tax Collection at source)

Hope this info. is useful.

Best Regards,
--Ashish

ImDon · #7 2nd March 2006, 01:23 PM

Quote:

Originally Posted by aca_trader

Well, Here is the answer:

Under section 139A of the Income Tax Act, Every person who is required to furnish any return u/s. 139 or whose total income is in excess of the amount chargeable to tax is required to obtain a PAN No.

It means, any person whose total income during the previous year exceeded Rs. 1,00,000 will have to obtain a PAN no. Now, as the income from trading in securities on Indian Stock exchanges has source in India, it's taxable in the hands of every trader irrespective of his residential status.

Assuming that the person in question will have profit in excess of Rs. 1,00,000obtaining a PAN becomes mandatory. Even if a loss is suffered by the person, he can't claim set-off of that loss against profits arising in next year untill he has filed a return of Loss during the previous year.

Hence, it becomes advisable to obtain PAN no. as no return can be filed without quoting the PAN no.

A plain reading of the abovequoted provisons makes it appear that a person who has a positive income in the range of Rs. 1-1,00,000 is not required to get a PAN no.

But here comes section 139(5A) which stipulates that Every person receiving any sum or income or amount from which tax has been deducted under the provisions of Chapter XVIIB, shall intimate his permanent account number to the person responsible for deducting such tax under that Chapter.

Summing up, a PAN no. is required for a person:

1. If he is required to file an ITR.
2. If he has a -ve income and he wants to claim set-off of loss in the future.
3. If he enters into any transaction which are subject to TDS/ TCS (Tax Collection at source)

Hope this info. is useful.

Best Regards,
--Ashish

Thanks for all the time you invested on my question, that was really informative and cleared all my doubts about getting a PAN card, now it makes much more sense to get a PAN card.

Thank you once again.

gabbar.singh · #8 6th November 2006, 06:43 PM

Quote:

Originally Posted by aca_trader

Well, Here is the answer:

Under section 139A of the Income Tax Act, Every person who is required to furnish any return u/s. 139 or whose total income is in excess of the amount chargeable to tax is required to obtain a PAN No.

It means, any person whose total income during the previous year exceeded Rs. 1,00,000 will have to obtain a PAN no. Now, as the income from trading in securities on Indian Stock exchanges has source in India, it's taxable in the hands of every trader irrespective of his residential status.

Assuming that the person in question will have profit in excess of Rs. 1,00,000obtaining a PAN becomes mandatory. Even if a loss is suffered by the person, he can't claim set-off of that loss against profits arising in next year untill he has filed a return of Loss during the previous year.

Hence, it becomes advisable to obtain PAN no. as no return can be filed without quoting the PAN no.

A plain reading of the abovequoted provisons makes it appear that a person who has a positive income in the range of Rs. 1-1,00,000 is not required to get a PAN no.

But here comes section 139(5A) which stipulates that Every person receiving any sum or income or amount from which tax has been deducted under the provisions of Chapter XVIIB, shall intimate his permanent account number to the person responsible for deducting such tax under that Chapter.

Summing up, a PAN no. is required for a person:

1. If he is required to file an ITR.
2. If he has a -ve income and he wants to claim set-off of loss in the future.
3. If he enters into any transaction which are subject to TDS/ TCS (Tax Collection at source)

Hope this info. is useful.

Best Regards,
--Ashish

Section 139A(8)(d) of the Income-tax Act exempts NRIs from obtaining PAN and quoting the same anywhere PAN is needed. Has this section been deleted?

aca_trader · #9 7th November 2006, 10:16 AM

Quote:

Originally Posted by gabbar.singh

Section 139A(8)(d) of the Income-tax Act exempts NRIs from obtaining PAN and quoting the same anywhere PAN is needed. Has this section been deleted?

Rule 114C framed u/s. 139A(8)(d) still stands in the book. However, even in such cases, quotation of PAN no of the Representative Assessee is mandatory. Futher, in the new e-returns even quotation of PAN no of the NRI assessee has become mandatory.

Best Regards,
--Ashish

gabbar.singh · #10 7th November 2006, 11:05 AM

Quote:

Originally Posted by aca_trader

Rule 114C framed u/s. 139A(8)(d) still stands in the book. However, even in such cases, quotation of PAN no of the Representative Assessee is mandatory. Futher, in the new e-returns even quotation of PAN no of the NRI assessee has become mandatory.

Best Regards,
--Ashish

Provisions of a section superceeds a rule framed under a section. That means a rule can not be framed that contravenes the provisions of a section of IT Act since this act has been passed by parliament.

This used to be the basic principal of government functioning a few years ago. Any rule framed that violates the provisions of a section is ultra-virus. Why is it not so in this case?

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