In a campaign started by Income Tax Department on Friday, emails were sent out to tax payers saying that the last date for linking PAN Card and Aadhaar is 31 December and that those PAN cards that are not linked will become inoperative or invalid from January 2020. The government is yet to clarify whether PAN can be re-activated after linking with Aadhaar after December 31 or an individual will have to re-apply for PAN once again.
Are the NRIs required to link the PAN and Aadhaar?
As per the Aadhaar Act, 2016, an individual who has resided in India for a period of 182 days or more is eligible to obtain an Aadhaar card. Hence, NRI is not entitled to obtain an Aadhaar card as per the Aadhaar Act.
Section 139 AA (2) of the Income Tax Act says that every person having PAN as on July 1, 2017, and is eligible to obtain Aadhaar, must intimate his Aadhaar number to tax authorities. However, section 139AA (3) read with Notification No. 37/2017, dated 11.5.2017 states that this will not be applicable to individuals who are NRIs as per the Income-tax Act. So the NRIs are not required by Law to link PAN and Aadhaar.
Further, Budget 2019 allowed only NRIs who are permanently returning back to India for good to apply for Aadhaar card and not waiting for 182 days stay in India.
Hence, if you are a NRI and holding Aadhaar, you are not mandatorily required to link your PAN with Aadhaar. However, it is your duty to inform all the service providers (eg. Indian Banks, Share Brokers, Mutual Fund house, Property Registrar, Income-tax, etc) in India that your residential status is NRI and that is the reason you have not linked your Aadhaar with PAN.
What happens if I don’t link my PAN and Aadhaar?
If a person who is mandatory required to link PAN and Aadhaar, fails to link then their PAN card will become inoperative. This will create difficulties in filing I-T returns, paying tax, registering the property, making any financial transaction, etc in India. Also, if PAN becomes inoperative, your Tax will be deducted at the highest rate.
To avoid unnecessary hassles, NRI can link the Aadhaar with PAN but it is not mandatory for the NRIs to link Aadhaar. It is only mandatory for those NRIs who have returned back to India for good and have obtained Aadhaar before completing 182 days stay in India.
What happens if you are a NRI and hold an Aadhaar card? Is it illegal?
Being an NRI staying outside India, you are not eligible to obtain an Aadhaar card in India. If you have one, it is illegal as you have made a false statement in the application form that you have stayed in India for more than 182 days in past 12 months from the date of application. Currently, there is no procedure to surrender or cancel the Aadhaar card. Hence, it is advisable to maintain proper updated records with your Bank, keep track of your number of days stay in India for each year and lastly, file your tax returns as NRI and report to the Tax department about your NRI status.
What happens if you are a NRI holding a PAN and don’t have an Aadhaar card?
If you are a NRI holding PAN but don’t have Aadhaar, you don’t have to worry at all. You just have to ensure that your present residential status is informed to all the service providers in India.
Why the Tax Department does wants to link the PAN and Aadhaar?
The Income Tax department wants all PAN card holders to link your PAN with Aadhaar by this date so as to unsure the unique identity of tax payers and prevent thrash out the duplicate and multiple PAN cardholders.
What is the procedure to link my Aadhaar and PAN?
- Visit the Income Tax Department e-filing portal – www.incometaxindiaefiling.gov.in
- Go to ‘Link Aadhaar’ option on the left side of the homepage
- Enter your PAN and Aadhaar number and your name as per Aadhaar
- Click ‘I have the only year of birth in Aadhaar card,’ if you have only the birth year on the Aadhaar
- Click ‘I agree to validate my Aadhaar details with UIDAI,’ and enter the captcha code on your screen
- Click on ‘Link Aadhaar’ option to request linking of PAN and Aadhaar
You can also check the status of the PAN-Aadhaar linking on the Income Tax Department’s website
If you wish to Link your PAN and Aadhaar, but are unable to do so, it could be because of the following reasons:
- Discrepancy in the name as per PAN and Aadhaar.
- Placing of the middle and last name or Surname
- Mismatch in the date of birth
- Gender mismatch
You need to approach the respective departments to rectify the mismatch in case of any discrepancy.
Will there be a further extension in the deadline to link the PAN and Aadhaar?
The Government is yet to clarify and whether PAN can be re-activated after linking with Aadhaar after December 31 or an individual will have to re-apply for PAN once again. Also, the rules regarding the PAN Aadhaar are not yet issued. Therefore, it is likely that the deadline will be further extended. Having said that, it is advisable to link the PAN and Aadhaar for all the eligible Aadhaar holders.
GPK’s take on the matter: If you are a NRI holding a PAN, kindly inform your Bank that your status is that of a NRI and you are not required to link your Aadhaar. If you are holding any Resident saving account in India, re-designate the bank accounts to NRI a/cs. If you are investing in National Saving Scheme (NSC), Kisan Vikas Patra (KVP), PPF, etc, you need to close these investment as they are not allowed for NRIs. Further, inform the Tax department by filing the tax returns and stating your status as NRI.
If you consider to link PAN and Aadhaar, you can contact our team at GPK Tax Consultants. Get in touch with us on kinjal@gpkapadia.com or helpdesk@gpkbsdubai.com. You can call us on +971563744876 to discuss Indian tax related matters.
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