NRIs can now transfer shares without PAN

Markets regulator Sebi’s decision this week to allow non- residents to transfer equity shares to their immediate relatives without an income- tax Permanent Account Number ( PAN) has come as a major relief for NRIs.

Non- residents like Overseas Citizens of India ( OCIs) , Non- Resident Indians ( NRIs), Persons of Indian Origin ( PIOs) and foreign nationals were facing difficulties in transferring the shares owned by them in listed companies, as many of them do not possess the required PAN card.

In order to address this issue, Sebi has decided to grant relaxation to the non- residents from furnishing PAN card details and allowed them to transfer equity shares held by them in the listed entities to their immediate relatives, a Sebi circular said.

“There were a number of PIOs and OCIs who have migrated from India but continue to just hold shares of a few listed companies. Many of them have been looking to transfer these shares to their close relatives by way of gift but were required to obtain PAN. They were concerned that obtaining a PAN will trigger income- tax related compliance requirements,” said Suresh Swamy, partner, PwC.

The relaxations are subject to certain conditions. Currently, under Sebi’s LODR ( Listing Obligation and Disclosure Requirements) provisions, transferee as well as transferor is required to furnish a copy of the PAN card to the listed entity for registration of transfer of the securities. This requirement has now been done away with for non- resident transferors.

However, the relaxation will be available only for transfers executed after January 1, 2016 and solely for non- commercial transactions i. e. transfer by way of gift among immediate relatives.

Besides, the non- resident will be required to provide a copy of an alternate valid document to ascertain identity as well as the non- resident status, a Sebi circular said. Immediate relative means a spouse of a person, parent, brother, sister or child of such person.