Attention NRIs: Know the Consequences of Non-Linking of Aadhaar with PAN

The Central Government has issued a directive making it mandatory to link PAN (Permanent Account Number) with Aadhaar card. The deadline for this linkage was June 30, 2023. Despite the clear instructions in the press release from the Central Board of Direct Taxes (CBDT) regarding the consequences of not linking PAN with Aadhaar, many taxpayers still failed to grasp the importance of this requirement.

As for Non-Residents of India (NRIs), their PANs have become inoperative automatically due to the fact that many NRIs do not possess an Aadhaar number, which is now a requirement.

An NRI addressed his grievance through social media stating that he could not see the refund status as his PAN was inoperative. Below the tweet, the Income Tax Department replied that “From 1st, July, 2023, the unlinked PAN becomes inoperative with certain consequences. The PAN can be made operative again in 30 days, upon intimation of Aadhaar to the prescribed authority after payment of fee of Rs. 1,000. Kindly refer to the Press Release for further details regarding this: pib.gov.in/PressRelease”

Read More: PAN-Aadhaar Link: Income Tax Dept refuses issue Refund to NRI due to Inoperation of PAN

Consequences of Non-Linking of PAN-Aadhaar

According to the press release “From 1st July, 2023, the PAN of taxpayers who have failed to intimate their Aadhaar, as required, shall become inoperative and the consequences during the period that PAN remains inoperative will be as follows:

1. no refund shall be made against such PANs;
2. interest shall not be payable on such refund for the period during which PAN remains inoperative;  and
3. TDS and TCS shall be deducted /collected at a higher rate, as provided in the Act.

What an NRI should do when your PAN become Inoperative

The Income Tax Department has granted an exemption to NRIs from linking their PAN with Aadhaar if they have already updated their NRI status with the department. If you have not yet informed the income tax department about your NRI status, it is advised to do so without delay.

To update your status in the PAN database, NRIs should reach out to their Jurisdictional Assessing Officer (JAO) online. You also need to provide supporting documents such as a copy of their PAN card and a copy of their passport indicating the duration of their residence outside India.

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