PAN-Aadhaar Link: Income Tax Dept issues clarification on Inoperation of PAN of NRIs/OCIs

The Income Tax Department has issued the clarification regarding the inoperation of Permanent Account Number (PAN) of Non-Residents of India (NRIs)/ Overseas Citizenship of India (OCIs).

According to the department Certain NRIs and OCIs have expressed concerns regarding their PANs becoming inoperative, even though they are exempt from linking their PAN with Aadhaar. Additionally, individuals who hold PANs that have become inoperative due to non-linking with Aadhaar have raised concerns about the potential consequences of this inoperability.

In this context, the following clarifications may be noted:

1. The Income Tax Department (ITD) has determined the residential status of Non-Resident Indians (NRIs) based on their filing of Income Tax Returns (ITR) in the past three Assessment Years (AYs) or if they have communicated their residential status to the Jurisdictional Assessing Officer (JAO). If any individual fails to meet either of these criteria, their PANs have been rendered inoperative.

NRIs whose PANs have become inoperative are advised to inform their respective Jurisdictional Assessing Officer (JAO) about their residential status, providing supporting documentation and requesting an update in the PAN database. The contact information for the JAO can be found at the following link: https://eportal.incometax.gov.in/iec/foservices.

2. The PANs of OCIs/foreign citizens, who may have applied for PAN under resident status and have not corrected/updated their residential status to the Jurisdictional Assessing Officer (JAO) or have not filed ITR in any of the last 3 A.Ys, have been rendered inoperative.

The OCIs/foreign citizens are requested to intimate their residential status to their respective JAO along with supporting documents with a request to update their residential status in the PAN database.

3. It is also clarified that an inoperative PAN is not an inactive PAN. One may file the Income Tax Return (ITR), irrespective of PAN becoming inoperative. Only following are the consequences of ‘inoperative’ PAN:

• Pending refunds and interest on such refunds will not be issued to inoperative PANs.
• TDS will be required to be deducted at a higher rate for inoperative PANs in accordance with section 206AA.
• TCS will be required to be collected at a higher rate for inoperative PANs in accordance with section 206CC.

The department also requested to refer to the CBDT Notification No.15/2023 dated 28th March, 2023 for details.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates