The Income Tax Department has issued a detailed statement clarifying the concerns raised by Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and foreign citizens regarding the consequences of inoperative Permanent Account Number (PAN) due to non-linking with Aadhaar.
The department has confirmed that NRIs and OCIs, who are exempted from PAN-Aadhaar linking, can still have their PAN cards rendered inoperative if they have not filed Income Tax Returns (ITRs) in any of the past three Assessment Years (AYs) or if they have not updated their residential status with their Jurisdictional Assessing Officer (JAO).
Those with inoperative PAN cards are requested to update their residential status to their respective JAO with supporting documents, as per the tax department.
This clarification also applies to OCIs and foreign citizens who have previously applied for a PAN under resident status but haven’t filed ITRs in any of the past three AYs or have not updated their residential status to the JAO.
The ITD has urged these individuals to disclose their residential status to their JAO and request an update on their residential status in the PAN database.
The JAO contact information can be found on the official ITD portal.
Furthermore, the department clarified that an ‘inoperative’ PAN does not mean ‘inactive’.
Taxpayers can still file ITRs even if their PAN has become inoperative. However, there are certain consequences for inoperative PANs.
These include the withholding of pending refunds and interest on such refunds, the requirement of Tax Deducted at Source (TDS) to be deducted at a higher rate in accordance with Section 206AA, and the requirement for Tax Collected at Source (TCS) to be collected at a higher rate under Section 206CC.
For further details, taxpayers are advised to refer to the CBDT Notification No.15/2023 dated March 28, 2023.
The ITD’s clarification aims to address the rising concerns and queries surrounding the repercussions of inoperative PAN due to non-linking with Aadhaar.
With this new information, NRIs, OCIs, and foreign citizens can now navigate the PAN-Aadhaar linking process more effectively and avoid any unintended tax complications.
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