Aadhaar PAN Linking For NRI: A Detailed Guide
- Farheen Mukadam
- Jul 9
- 8 min read
The required linkage of Aadhaar and PAN is currently causing uncertainty for Non-Resident Indians (NRIs). As a result, many NRIs have had their PAN numbers deactivated, which has frozen their investments and prevented them from transacting in mutual funds, SIPs, and similar schemes. Many NRIs have inoperative PANs since they haven't linked their PAN and Aadhaar, even though it's not necessary. Many NRIs have inoperative PANs since they haven't linked their PAN and Aadhaar, even though it's not essential. For Indian nationals living overseas, this thorough guide covers every aspect of PAN-Aadhaar linkage, including how to avoid PAN deactivation.
Table of Contents
What is Aadhaar-PAN Linking?
PAN-Aadhaar linkage is the process of combining your 12-digit Aadhaar card number, supplied by the Unique Identification Authority of India (UIDAI), with your Permanent Account Number (PAN) provided by the Income Tax Department. This linkage was required for all PAN card holders in India by Section 139AA of the Income Tax Act.
Why Linking PAN and Aadhaar is Essential for NRIs
As an NRI, integrating your PAN with Aadhaar is an online process that can be completed from anywhere. The Indian government requires this connection to enforce adherence to tax laws and prevent fraudulent financial activity, which makes it crucial. The Indian government requires this connection to enforce adherence to tax laws and prevent fraudulent financial activity, which makes it vital. You can prevent interruptions to your financial activities and guarantee the seamless operation of your banking and investment services by connecting your PAN and Aadhaar. You must complete this step before the deadline to avoid penalties and guarantee that your PAN is valid for all Indian banking needs.
Steps to Link PAN with Aadhaar
Step 1: Check out the website for income tax e-filing.
Go to the portal at https://www.incometax.gov.in/iec.
Step 2: Choose the option to "Link Aadhaar"
On the homepage, select the "Link Aadhaar" option.
Step 3: Put your details here
Enter the exact name, birthdate, PAN, and Aadhaar number that appears on your Aadhaar.
Step 4: Verify and send in
Verify that the information matches what you have on file before sending in the request. The registered mobile phone number you provided for verification received an OTP.
Step 5: Verify the status
You can monitor the progress of your linking request in the same area after it gets filed.
Is Aadhaar-PAN Linking Mandatory for NRIs?
Before June 30, 2023, a person who has an Aadhaar or is eligible to get one must link it to their PAN as per the guidelines of Section 139AA. NRIs are exempt from this obligation as they are not eligible to receive an Aadhaar number; instead, they must amend their residential status on the Income Tax Portal by providing their passport and proof of previous residency in India. A PAN number that is invalid or inoperative due to an NRI's failure to alter their residential status can have several negative consequences, including the inability to file a return, the suspension of investment transactions, the incapacity to receive a refund, and an increased TDS deduction rate.
Inactive or Inoperative PAN for NRI
Financial hardship has resulted from the invalidation of PAN cards of several NRI since July. Mutual funds, a vital component of many people's finances, have been severely impacted. Investments and dividend payments are suspended for non-resident Indians (NRIs) with inactive PANs since they are not eligible for new SIPs, STPs, or SWPs under AMFI regulations. It also affects income tax filing, as inactive PANs hinder refund claims and reduce TDS certificates, which lessens rental income, property sales revenue, and NRO account revenue. To put it briefly, the invalidation has had a cascading effect, resulting in NRIs facing administrative challenges and financial difficulties.
NRIs are necessary for India's economic prosperity. Their benefits to the country's financial stability through inbound remittances go beyond improving its reputation abroad. While NRI investments in bonds, shares, and mutual funds support India's foreign exchange reserves, these remittances account for around 3% of the nation's GDP. PAN card disruptions may undermine India's macroeconomic stability by affecting remittance inflows and financial well-being.
How Can NRIs Rectify an Inoperative PAN Status?
As an NRI whose PAN has become inactive due to Aadhaar not being linked, you have two options:
The first option is to have your NRI status changed in the income tax agency's records by contacting them directly. To accomplish this, you must send an email to the PAN Nodal Officer in the jurisdiction where your PAN is registered. To address PAN issues in Bengaluru, for example, you need to send an email to the Nodal Officer. In your email, mention that your PAN is no longer valid and that you are an NRI. A copy of your passport, visa stamps, NRI tax returns, and proof of your abroad residency are examples of supporting paperwork. Furthermore, you must supply a copy of your PAN card. To avoid undergoing the necessary Aadhaar seeding, ask them to update your status as an NRI in their database. The income tax department will automatically renew your PAN once they have updated your residential status in their records, as long as you continue to file annual ITRs. They will contact you when finished.
Applying for an Aadhaar card in person at an Aadhaar facility in India is the second choice. Although they are free to do so if necessary, NRIs are not legally required to get an Aadhaar card. When your PAN is issued, you can link it to your Aadhaar number via the income tax department's e-filing system. You must be physically present at an Aadhaar Kendra to have your biometrics taken in this case. You can only use the abroad online Aadhaar application tool to make appointments; you need to go to the center in person to finish the enrollment requirements.
How can NRIs prevent PAN deactivation?
Non-resident Indians can prevent their PAN from being deactivated by adopting the following preventative actions:
Communicate the NRI status to the IT department: The government does not immediately know that you are a non-resident individual (NRI) merely because you have been filing returns as such. Tell them that you are an NRI and that you plan to stay that way. Provide supplementary materials to facilitate status updates.
Give the PAN an international address: A legitimate residential address outside of India must always be included when applying for a new PAN card or changing current PAN information. Your status as an NRI will get validated.
Update IT records if circumstances change: Ensure to update your IT and NSDL-PAN records to reflect any changes to your Indian resident status.
Notify UIDAI of your Aadhaar ineligibility: As you do not have to link your Aadhaar card to your PAN, proactively inform UIDAI that you are an NRI when you have one created. Present documents if required.
Monitor the condition of PAN: Check your PAN status on the NSDL website regularly, and if it appears to be disabled, take immediate action. Prompt correction can prevent issues.
Documents Required to Update NRI Status
When you request an update on your status, you must include the required documentation from the income tax department proving that you are an NRI. Key documents needed are:
PAN card copy: A copy of your PAN card proves your identity and aids in finding your PAN information.
Passport copy: You must present a copy of your passport and any documents attesting to your non-resident status that show visa stamps.
Evidence of residency abroad: You can include documents proving your international address, such as bank records, utility bills from overseas, and driver's licenses.
Evidence of NRI tax return filing: To prove your compliance history, including acknowledgments of income tax returns you submitted as an NRI.
Proof of stay in India: Please include documentation of your previous presence in India, such as bills or property records, if you were an Indian resident before becoming an NRI.
Giving the IT department this paperwork enables them to update your PAN information and confirm that you are a non-resident Indian. After an update, your PAN can still operate without Aadhaar seeding.
Can an NRI File ITR with an Inoperative PAN?
You can still file your income tax return as an NRI even if your PAN stops working. However, it's necessary to understand what happens if a PAN is inoperative.
Pending Refunds: Returns submitted with an invalid PAN will not be eligible for refunds or interest on those refunds.
Increased TDS Deduction: By Section 206AA, sales with an inactive PAN will result in a higher TDS (Tax Deducted at Source) deduction rate.
Increased TCS Collection: In line with Section 206CC, transactions containing an inoperative PAN will also result in a higher rate of TCS (Tax Collected at Source) collection.
To prevent any possible financial repercussions, you must be aware of these ramifications when submitting your tax returns.
Conclusion
The Pan-Aadhaar linking problem has presented significant obstacles for you as an NRI, affecting your financial dealings and potential investments in India. Your financial operations may have been interrupted by the non-functioning PAN card, causing anxiety and confusion. The authorities must give NRIs explicit rules and responsibilities to promote easier compliance with the connecting procedure. In the interim, resolve the inoperative PAN issue by following the previously outlined steps.
Frequently Asked Questions
Is it mandatory for NRIs to link PAN with Aadhaar Card?
No, non-resident Indians are not required to apply for an Aadhaar card. You must link your Aadhaar card and PAN if you already have one to prevent your PAN from being canceled.
What is the consequence of not linking my PAN with Aadhaar?
If you don't link your PAN to Aadhaar before the deadline, it may stop working. Financial operations such as opening bank accounts, filing tax returns, and investing in India may be impacted by this.
Who is exempted from Aadhaar PAN linking?
In addition to non-resident taxable persons under the Income-tax Act of 1961 and people over 80 (Super Senior Citizens), the exempt group also includes residents of Jammu and Kashmir, Assam, and Meghalaya.
What is the difference between an NRI PAN card and a normal PAN card?
An NRI PAN card and a regular PAN card are identical. An NRI PAN card is the same as one granted to Indian citizens. Those who are Overseas Citizens of India (OCI) or of Indian descent with foreign citizenship, however, must fill out Form 49AA when they apply for a PAN card.
Can NRIs apply for Aadhaar if they already do not have one?
No, unless they have been in India for 182 days or more within the past 12 months, non-resident Indians are not obliged to get an Aadhaar card.
What should I do if details on my PAN and Aadhaar don’t match?
Check that the names, dates of birth, and gender on the two documents match. Before linking, make any necessary updates to the PAN or Aadhaar information if there is any difference.
Should NRIs update their Aadhaar with NRI status before linking it with PAN?
Yes, before connecting your Aadhaar card to your PAN numbers, you need to update it at an Aadhaar Enrollment Center to reflect your status as an NRI.
Is a deadline applicable for NRIs to link PAN and Aadhaar?
Indeed, the government sets timeframes for connecting PAN and Aadhaar. An NRI should adhere to the timeline as native Indians if they possess both a PAN and an Aadhaar.
Can I link PAN and Aadhaar without an Aadhaar-linked mobile number?
No, the connection step requires an OTP sent to the mobile number linked to your Aadhaar account. If your phone number isn't already registered, update it by going to an Aadhaar Enrollment Center.
What are the fees for linking PAN with Aadhaar?
Currently, if you link your PAN and Aadhaar beyond the deadline, you might be charged a late fee of Rs. 1,000.
Related Posts
See AllFiling income tax returns accurately is crucial for avoiding penalties and ensuring compliance with Indian tax laws. Mistakes in the original return can happen, but taxpayers have remedies through re
Comments