RIYADH, 30 October 2006 — If you are a non-resident Indian (NRI) or a person of Indian origin (PIO) and are wondering how to meet the deadline of Dec. 31, 2006 to obtain permanent account number (PAN) issued by India’s Income Tax Department, there is good news. The Directorate of Income Tax has now decided to allow NRIs and PIOs to get their PAN on the basis of their passports.
The PAN is necessary for investors who deal in Indian stock markets, businesses and other high value investment products. Earlier, National Security Depository Limited (NSDL), a governing authority for depository services (dematerialized accounts) had asked investors, both residents and non-residents to provide PAN on or before Sept. 30 or risk suspension of their accounts. The date has now been extended to Dec. 31, 2006 because of the pressure from the investor community. Still, some, especially NRIs and PIOs have been finding it difficult to manage the paper work involved. The new directive is to their advantage as it seeks to simplify the process.
The Securities and Exchange Board of India (SEBI), as a friendly measure, has been allowing NRIs and PIOs to sell their securities held in physical form even though they did not have PAN. This was being done by giving these investors access to “limited purpose BO (Beneficiary Owner) account”. Much to the delight of these PAN-less investors, this facility was later extended for trading in the cash market.
However, with the Income Tax Department allowing PAN on the basis of passports, SEBI has asked “limited purpose BO account” beneficiaries to comply with the PAN requirement on or before Dec. 31. Investors, NRIs and PIOs in particular can no longer have the excuse of not having PAN for they definitely have passports and the onus is placed on them to expedite the process and meet the deadline.
