NRI can apply for PAN in India

SC Vasudeva

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Q. A person has got citizenship in a foreign country. He was not having a PAN card while he was residing in India. Now that he has become an NRI, can he open an NRO account in a nationalised bank and apply for a PAN card in India? — Ramesh Kumar Sharma

A: A non-resident Indian can apply for Permanent Account Number.  He should be able to open a Non-Resident ‘Ordinary’ Account with a bank in India in which any amount on account of income arising in India can be deposited. The application for PAN can be filed in Form No. 49AA which can be obtained online. 

Q. I am a retired government employee. My source of income is pension and interest from fixed deposit of bank. I am an income tax payee. My son is in government service and will retire after five years. He is also an income tax payee. My son wants a loan from me to purchase a flat in Gurgaon. What is the procedure to give him loan through cheque? What documents are required by him if any query is raised by the Income Tax Department about the source of funds to purchase a flat?

A: You can give a loan to your son by an account-payee cheque. A letter along with which the cheque is enclosed should specify that the amount is being given as a loan. It should also specify whether the loan is being given without interest or shall carry interest. In case the loan carries interest, the terms of payment of the interest should also be specified in the letter. The letter which contains such details should be a sufficient evidence to prove the source of funds. The transaction being through the banking channels, it should not be difficult for your son to prove the source of the loan received by him from you.

Q. Can I gift Rs 10 lakh to my husband to purchase agricultural land? He is unemployed and doesn’t file income tax return. I am a government employee and will draw money from my GPF. Please advise. — Anita Sharma

A: You can make a gift of Rs 10 lakh to your husband without attracting any tax liability in respect of the receipt of gift by your husband. However, income arising from the investment of the gift given to your husband shall be clubbed with your income. It has been stated in the query that the gift would be utilised for purchasing agricultural land. The amount of agricultural income, if any, arising from carrying agricultural operations, shall be clubbed with your income for the purpose of computing the tax rate applicable to your income. Please note that you must inform the department concerned of the Government of India in which you are working that you have gifted a sum of Rs 10 lakh to your husband for buying agricultural land.

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