Income-tax department vide a tweet on 18.07.2023 has clarified the issue of making the PAN of Non-resident Indians (NRIs) and Overseas Citizenship of India (OCI) inoperative due to non-linking of PAN with Aadhaar even when they are not legally required to link their PAN with Aadhaar.
Instances have come to notice that many PAN of NRIs and OCIs have become inoperative from 1st July, 2023 due to the non-linking of their PAN with Aadhaar after the extended deadline to link PAN with Aadhaar ended on 30th June, 2023.
In the tweet, the income-tax department said that concerns have been raised by certain NRIs/ OCIs regarding their PANs becoming inoperative, although they are exempted from linking their PAN with Aadhaar.
As per CBDT Notification No. 37/2017 dated 11.05.2017 the following individuals are exempt from linking their PAN with Aadhaar-
(i) An individual who is residing in the States of Assam, Jammu and Kashmir, and Meghalaya;
(ii)An individual who is a non-resident as per the Income-tax Act, 1961;
(iii) An individual who is of the age of eighty years or more at any time during the previous year; or
(iv)An individual who is not a citizen of India
PAN holders, whose PANs have been rendered inoperative due to non-linking of PAN with Aadhaar, have expressed concern over certain consequences of PAN becoming inoperative.
In this context, income-tax department has issued the following clarifications for the NRIs/OCIs in relation to the inoperative PANs due to non-linking with Aadhaar-
1. Income-tax department has mapped the residential status of NRIs in case they have filed the ITR in any of the last 3 Assessment Years or they have intimated their residential status to the Jurisdictional Assessing Officer (JAO). The PANs have been rendered inoperative, in case any one of the above-mentioned criteria is not met.
The NRIs whose PANs are inoperative 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. Details of JAO can be found at - https://eportal.incometax.gov.in/iec/foservices/#/pre-login/knowYourAO
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 AYs, 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.
Details of JAO can be found at - https://eportal.incometax.gov.in/iec/foservices/#/pre-login/knowYourAO
3. It is clarified that an inoperative PAN is not an inactive PAN. One may file the Income Tax Return (ITR), irrespective of PAN becoming inoperative.
As per Rule 114AAA (notified vide CBDT Notification No. 15/2023 dated 28.03.2023), the following are the consequences of ‘inoperative’ PAN:
i. Pending refunds and interest on such refunds will not be issued to inoperative PANs.
ii. TDS will be required to be deducted at a higher rate for inoperative PANs in accordance with section 206AA.
iii. TCS will be required to be collected at a higher rate for inoperative PANs in accordance with section 206CC.
Read the tweet of the income-tax department here-
Dear Taxpayers,
— Income Tax India (@IncomeTaxIndia) July 18, 2023
Concerns have been raised by certain NRIs/ OCIs regarding their PANs becoming inoperative, although they are exempted from linking their PAN with Aadhaar.
Further, PAN holders, whose PANs have been rendered inoperative due to non-linking of PAN with Aadhaar,…
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