Non-resident Indians, foreign citizens and other entities based abroad can obtain an income tax permanent account number (PAN) for trading in the market on the basis of passport and a copy of a bank account in the country of residence, the Securities and Exchange Board of India (SEBI) said in a circular.
"PAN can be obtained by NRIs on the basis of their passport and a copy of a bank account in the resident country as identity proof (ID) and address proof," the SEBI circular said.
"Since NRIs/PIOs/foreign nationals have now been enabled by the income tax department to obtain PAN as stated above, it has been decided to withdraw the facility of opening a limited purpose beneficiary owner (BO) account/trading account by them without PAN," the circular added.
However, the NRIs and persons of Indian origin (PIOs) who have already opened such BO accounts or trading accounts without PAN shall be required to comply with the mandatory requirement of PAN on or before December 31, 2006, failing which such accounts shall be made inoperable by the depository / depository participant/ broker, the circular said.
SEBI had made it mandatory to obtain PAN for operating beneficiary owner (BO) account as well as trading in the cash market. The market regulator has now withdrawn the earlier guidelines following a directive from the directorate of income tax.