Nris: Linking Pan And Aadhaar

As of June 2023, it is not mandatory for Non-Resident Indians (NRIs) to link their PAN cards with their Aadhaar cards. However, to avoid any potential tax or legal complications in India, NRIs should either link their PAN to Aadhaar or update their status as non-resident in the tax department records.

NRIs who do not link their PAN cards with their Aadhaar cards by the deadline of June 30, 2023, will have their PAN cards become inoperative or invalid. This will result in a fee/penalty of up to Rs.1000/-.

NRIs don't need to link their PAN and Aadhaar, but it is beneficial

As per the Income Tax Act, 1961, NRIs are not mandated to link their PAN and Aadhaar. However, it is beneficial for them to do so to avoid potential tax or legal complications in India. Here are some key points to consider:

• Mandatory for Resident Indians: It is important to note that while linking PAN and Aadhaar is not mandatory for NRIs, it is compulsory for resident Indians. This requirement was introduced as part of the Finance Bill 2021.
• Consequences of not linking: If NRIs choose not to link their PAN and Aadhaar, they must update their residential status as NRI in the Income Tax portal online. Failure to inform the Income Tax department about their residential status and not linking PAN and Aadhaar may result in their PAN becoming non-functional.
• Deadlines and penalties: The deadline for linking PAN and Aadhaar was recently extended to June 30, 2023. If individuals, including NRIs, do not meet this deadline, their PAN will become inoperative, and they will be subject to a penalty of up to INR 1,000.
• Benefits of linking: Linking PAN and Aadhaar offers several benefits to cardholders, including streamlining financial transactions and ensuring compliance with tax regulations.
• Linking process: The process of linking PAN and Aadhaar for NRIs is straightforward and can be done through the Income Tax e-filing portal. It typically takes up to 6 to 7 days for the linking process to be completed.
• Name mismatch: It is important to ensure that the names on both the PAN and Aadhaar cards match. Any mismatch in names will delay the linking process. Errors can be rectified by following the instructions provided by the respective authorities for updating PAN and Aadhaar details.
• Exempted categories: According to the Income Tax Department portal, certain categories of individuals are exempted from linking PAN and Aadhaar, including NRIs, individuals above 80 years of age, residents of Assam, Jammu and Kashmir, and Meghalaya, and non-citizens of India.

In conclusion, while NRIs are not mandated to link their PAN and Aadhaar, it is beneficial for them to do so to avoid potential tax-related issues and ensure a smooth financial transaction process.

NRIs can avoid legal complications by linking PAN and Aadhaar

The Indian government has made it mandatory to link the Permanent Account Number (PAN) with the Aadhaar number. While this is compulsory for resident Indians, it is not mandatory for Non-Resident Indians (NRIs) and Overseas Citizen of India (OCI) cardholders. However, NRIs can avoid potential legal complications by linking their PAN and Aadhaar.

The Importance of Linking PAN and Aadhaar for NRIs

Linking PAN and Aadhaar is beneficial for NRIs to avoid legal complications in India. While it is not compulsory for NRIs to obtain an Aadhaar card, linking the two will ensure smoother financial transactions and tax compliance.

Consequences of Not Linking PAN with Aadhaar

Failing to link PAN with Aadhaar can result in the following issues:

• The PAN card will become inoperative or invalid.
• Inability to file income tax returns.
• Higher rates of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS).
• Penalties of up to Rs.10,000 under various sections of the Income Tax Act, 1961.
• Non-compliance with financial transaction requirements, leading to additional penalties.

How to Link PAN and Aadhaar for NRIs

To link their PAN and Aadhaar, NRIs can follow these steps:

• Visit the Income Tax e-filing portal.
• Register and log in with your PAN number, password, and date of birth.
• A pop-up window will appear, prompting you to link your PAN with Aadhaar.
• Verify the PAN details on both cards and enter your Aadhaar number.
• Click the "Link Now" button.

Alternatively, NRIs can send an SMS to 567678 or 56161 with the text UIDPAN .

Deadlines for Linking PAN and Aadhaar

The Central Board of Direct Taxes (CBDT) has set deadlines for linking PAN and Aadhaar, with the most recent deadline extended to June 30, 2023. It is important for NRIs to be aware of these deadlines and complete the linking process to avoid any penalties.

NRIs must update their status as non-resident in tax records

As a Non-Resident Indian (NRI), it is important to ensure that your residential status is updated in the income tax records to avoid any complications. Here are the key reasons and methods to update your status:

The income tax department in India is continually updating its data, and NRIs may receive communications due to the absence of updated residential information. This can lead to undesirable inquiries and notifications. By updating your status, you can avert these inconveniences and ensure tax compliance.

Two Methods to Update Your Residential Status:

• Update Your Profile Online: Visit the income tax department's website, create your profile using your PAN card number, and change your residential status to "Non-Resident" in the profile section. This method is quick and can be done immediately.
• Update Your PAN Card Data: Visit the NSDL or UTIISL websites, fill out the online form to update your PAN card data, and specify the change in your residential status to "Non-Resident." This method ensures that all income tax-related information aligns with your NRI status and is a more comprehensive and lasting solution.

Other Important Considerations:

• Open an NRO Account: It is recommended to open an NRO (Non-Resident Ordinary) account to manage your Indian income, especially if you have income-generating assets in India. This helps avoid discrepancies in your income tax data.
• Update Contact Information: Keep your email address, mobile number, and foreign address up to date. Providing your foreign address is crucial as it allows the income tax department to send notices to your overseas address if needed.

By following these steps, you can maintain tax compliance and enjoy a seamless financial journey as an NRI.

NRIs can link PAN and Aadhaar online or by post

NRIs and the Linking of PAN and Aadhaar

As per the notification number 37/2017, the government of India states that the provisions of Section 139AA shall not apply to:

• Individuals who do not possess an Aadhaar number or the Enrolment ID
• Those residing in the Indian states of Assam, Jammu and Kashmir, and Meghalaya
• Non-residents as per the Income-tax Act, 1961
• Individuals aged 80 or above at any time during the previous year
• Non-citizens of India

Therefore, it is not mandatory for NRIs to link their PAN and Aadhaar. However, to avoid potential tax or legal complications, NRIs should link the two, or update their status as non-resident.

Linking PAN and Aadhaar Online

To link your PAN with Aadhaar online, follow these steps:

• Visit the Income Tax e-filing portal
• Register on the portal if you haven't already
• Log in by entering your User ID (PAN number), password, and date of birth
• A pop-up window will appear, asking you to link your PAN with Aadhaar
• Verify the PAN details with the ones mentioned on your Aadhaar card
• If the details match, enter your Aadhaar number and link your PAN with Aadhaar by clicking "link now"

Linking PAN and Aadhaar by Post

To link your PAN with Aadhaar by post, follow these steps:

• Visit the NSDL website
• Download Form 49AA and fill in your personal details
• Scroll down the form to find the list of documents you need to provide, along with a set of detailed instructions
• Affix a recent passport-sized photograph of yourself
• Tick the boxes on the left margin where you made corrections
• Mail the form with the documents to:

The Income Tax Pan Services Unit, 5th Floor, Mantri Sterling, Plot No- 341, Model Colony (Near Deep Bungalow Chowk)

Checking the Status of Your PAN and Aadhaar Linking

To check if your PAN and Aadhaar have been successfully linked, go to the website of the IT department and enter your PAN and Aadhaar card numbers. Click on the button below the two boxes to view the status.

NRIs who don't link PAN and Aadhaar may face consequences

The Indian government has made it mandatory to link an individual's Permanent Account Number (PAN) with their Aadhaar number. However, this requirement does not extend to Non-Resident Indians (NRIs) as they are not eligible to obtain an Aadhaar number unless they plan to stay in India for more than 182 days in a financial year.

Exemptions for NRIs

According to the Income Tax Act, 1961, and a notification issued by the Income Tax Department, Aadhaar-PAN linking is not mandatory for the following categories of individuals:

• Non-Resident Indians (NRIs)
• People of Assam, Meghalaya, and residents of the Union Territory of Jammu and Kashmir
• Individuals aged 80 or above in the previous year
• Persons who are not citizens of India

Consequences of not linking PAN and Aadhaar for NRIs

While Aadhaar-PAN linking is not mandatory for NRIs, they may face certain consequences if they choose not to link the two. Here are some potential issues that NRIs may encounter:

• Inoperative PAN Card: NRIs who do not link their PAN and Aadhaar may have their PAN cards become inoperative or invalid. This means that the PAN card will be treated as if it had never been applied for, allotted, furnished, or quoted.
• Difficulties in financial transactions: NRIs may face challenges and adverse consequences in their financial transactions if their PAN is not linked to Aadhaar. This could include difficulties in completing KYCs with banks, financial institutions, and portals.
• Penalty fees: A non-refundable fee of Rs. 1,000 is applicable for linking Aadhaar with PAN after the due date.
• Tax deductions and collections: Taxes required to be deducted on incomes may be deducted at a higher rate of 20% or the applicable rate, whichever is higher. Similarly, taxes required to be collected on any payment may be collected at twice the applicable rate or 5% (up to a maximum of 20%).
• Refund delays: Any refunds due under the Income Tax Act may not be processed until the PAN becomes operative again. Additionally, no interest shall be paid on these refunds for the period from 1st July 2023 until the date the PAN becomes operative.

Therefore, while Aadhaar-PAN linking is not mandatory for NRIs, it is advisable to do so to avoid potential complications and fees in financial transactions and tax-related matters.

Frequently asked questions