Non-resident Indians (NRIs) have been facing difficulties related to PAN-Aadhaar linking due to the confusion surrounding whether this linking is mandatory for them. This detailed guide covers all the key aspects regarding PAN-Aadhaar linking for NRI citizens.

What is PAN-Aadhaar linking?

PAN-Aadhaar linking refers to linking your Permanent Account Number (PAN) issued by the Income Tax Department with your 12-digit Aadhaar card number issued by the Unique Identification Authority of India (UIDAI). The Indian government made this linking mandatory for all PAN card holders under Section 139AA of the Income Tax Act. 

Is PAN-Aadhaar linking mandatory for NRIs?
 

As per Aadhaar card regulations, PAN-Aadhaar linking is mandatory only for those individuals who are eligible to obtain an Aadhaar card in India. Non-Resident Indians are not obligated to enrol for an Aadhaar number if they are residing abroad. Hence, Aadhaar-PAN linking for NRIs is not a mandatory requirement as per current laws.

However, many non-resident Indians still find that their PAN cards have been marked as inoperative or invalid due to the non-linking of their Aadhaar cards. This is happening because the PAN database is being automatically updated to deactivate PANs which are not linked with Aadhaar numbers without checking the individual's residential status. So, NRIs who are unaware of this fact are getting impacted.

Why has my NRI PAN card become inoperative?
 

There could be two main reasons why PAN cards of NRIs are getting deactivated or are inoperative despite them clearly being ineligible for compulsory Aadhaar linkage. 

The first reason is that the Income Tax department's records and database do not reflect the NRI status of the PAN cardholder. For instance, you may have been living abroad and filing taxes as a Non-Resident for many years. However, if you did not specifically notify the Income Tax authorities about your NRI status through the required formalities, their systems still show your residential status as resident Indian.

In such cases, when the IT department initiates automatic PAN deactivation for not linking Aadhaar, your PAN is also deactivated since as per their records, you are a resident expected to link your Aadhaar card. The IT systems do not check your actual NRI status before taking this action. 

The second possibility is that you may not have officially informed the Income Tax authorities about your status as an NRI even if you have been filing tax returns as a non-resident. It is mandatory for NRIs to formally intimate the IT department about their NRI status and period of overseas residency regardless of how long they have been filing NRI tax returns.

If you have not specifically notified them about your residential status, the department will continue to consider you as a resident Indian whose PAN must be linked to Aadhaar. Hence, this is how PAN card for NRI citizens can get deactivated for non-compliance.

How can NRIs rectify their inoperative PAN status?
 

As an NRI whose PAN has turned inactive due to non-linking of Aadhaar, you have two options to rectify this status:

The first option is to directly approach the income tax department and get your NRI status updated in their records. This can be done by sending an email to the Nodal Officer for PAN of the jurisdiction where your PAN is registered. For example, if your PAN is registered in Bengaluru, you must email the Nodal Officer for PAN matters in Bengaluru.

In your email, mention that you are an NRI and your PAN has become inoperative. Attach supporting documents like copy of passport, visa stamps, tax returns filed as an NRI, and proof of overseas residence. Also attach a copy of your PAN card. Request them to update your status as an NRI in their database to avoid compulsory Aadhaar seeding.

Once the income tax department updates your residential status in their systems, your PAN will automatically get reactivated provided you keep filing ITRs annually. You will get an intimation from them once this is done.

The second option is to apply for an Aadhaar card by visiting an Aadhaar centre in India. Although NRIs are not legally obligated to get an Aadhaar card, they can voluntarily enrol for it if required. After obtaining the Aadhaar number, you can link it to your PAN through the e-filing portal of the income tax department.

However, this option requires you to be physically present in India to provide your biometrics at an Aadhaar Kendra. The overseas online Aadhaar application facility is only for scheduling appointments, and you must visit the centre yourself for completing enrolment formalities.

Documents required to update NRI status with IT department 
 

To validate your NRI status, the income tax department requires you to submit certain key documents as proof along with your communication requesting an NRI status update. The key documents required are:

• Copy of PAN card: This establishes your identity and helps them locate your PAN details.
• Copy of passport: Relevant pages displaying visa stamps that indicate your NRI status need to be submitted. This proves you reside overseas.
• Proof of overseas residence: You can attach documents like overseas utility bills, bank statements, driving license etc. showing your foreign address.
• Proof of filing NRI tax returns: Attach acknowledgments of income tax returns filed as an NRI to demonstrate your compliance record.
• Proof of stay in India: If you were previously a resident Indian before becoming NRI, submit proofs like property documents or bills showing your past Indian address and stay. 

Providing this documentation helps the IT department verify and update your status as a non-resident Indian for PAN records. Once updated, your PAN can remain active without Aadhaar seeding.

How can NRIs prevent PAN deactivation?
 

By taking certain proactive measures, non-resident Indians can avoid landing in a situation where their PAN is deactivated:

1. Inform IT department about the NRI status

Do not assume that the department is automatically aware of your NRI status if you have been filing returns as a non-resident. Explicitly inform them about your status and intent to continue as an NRI. Provide supporting documents to facilitate status updates. 

2. Provide overseas address for PAN

While applying for a new PAN card or updating PAN data, always provide your valid overseas residential address instead of any old Indian address. This will denote your NRI status.

3. Update IT records if status changes

If at any point you change your Indian residency status, be sure to update the same in IT and NSDL-PAN records by re-affirming your NRI status.

4. Inform UIDAI about ineligibility for Aadhaar

If you do get an Aadhaar card made, proactively intimate UIDAI about being an NRI which does not require you to link it with PAN. Provide documents if needed.

5. Track PAN status

Periodically check your PAN status on the NSDL website and take prompt action if it shows as deactivated. Quick rectification can avoid problems.

Conclusion

To summarise, PAN-Aadhaar linking is not mandatory for Non-Resident Indians. By being aware of the process and proactively managing PAN status, NRIs can avoid difficulties related to their PAN card getting deactivated. 

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