Permanent Account Number (PAN) refers to a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department in India. It is a must to have a PAN for those who intend to do investments & file their income tax returns in India. It can be considered as an Indian Tax Number (Tax ID) and an ID proof.

PAN is mandatory as per the Indian Income Tax Department. With effect from April 1, 2006, SEBI has also made PAN compulsory for all investors wanting to invest in India. It is also compulsory to mention a PAN if one wants to carry any kind of financial or investment related transaction in India over Rs.49,999.

As per the Indian Tax Department, it is now necessary to quote a permanent account number on most types of financial and investment related transactions in India and also on the tax forms while filing taxes in India. You need to provide a permanent account number if you want to open a Demat Account, make stock investment, buy sell shares/stocks or mutual funds, invest in other kinds of financial assets, purchase real estate, opening bank account, get loans, applying for a visa and passport, receiving rental income, get foreign remittance from abroad, etc.

In general having a PAN or the permanent account number does not bring any benefits; rather it is more of a compulsion laid by the Income Tax Department of India. It is compulsory requirement for NRIs - Non Resident Indians living abroad to have a pan card if they intend to carry any kind of financial or investment related transactions in India. There are not much benefits of possessing a pan, instead it's more of a rule that is laid by the Indian IT department to have such a tax id.

Thus, one may consider it as a Tax ID which is a must for NRIs if they intend to Invest in Shares, open a Demat account, purchase real estate, open a NRI bank account, getting loans, applying a visa or passport, enjoy income from rent, get foreign remittance, etc.

As far as we know it's not compulsory for NRIs to file taxes in India even if they hold a PAN, however you only file taxes if you generate income from India. Filing taxes does not mean you pay taxes. Filing tax returns & paying taxes are 2 different things. You pay only taxes if you are making money or generating income in India. Thus, it is always advised to file taxes even though you are not making any money in India, because it enhances your credibility and makes it easy for one to get various types of loans.