For many NRIs their residential status in the records of the Income Tax Department as per PAN may not have been updated as a ‘non-resident’, which could have also resulted in their PANs becoming inoperative due to non-linking with Aadhaar. NRIs who do not have Aadhaar are exempted from the linking process only if they update their residential status as non-resident in the income tax portal.
The Income Tax Department on Tuesday clarified that non-resident Indians can still file income tax return even if their PAN becomes inoperative. However, the consequences of an “inoperative” PAN are:
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
NRIs and foreign citizens whose PANs have become inoperative due to non-linking with Aadhaar should submit proof of their residential status to the jurisdictional assessing officer (JAO) for along with supporting documents for operationalising the PAN. They should also make a request to update their residential status in the PAN database.
The details of JAO can be found at the e-filing portal – https://eportal.incometax.gov.in/iec/foservices/#/pre-login/knowYourAO
The income tax department has also mapped the residential status of NRIs in case they have filed the ITR in any of the last three Assessment Years or they have intimated their residential status to the Jurisdictional Assessing Officer (JAO).
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.
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