How NRIs can Link Aadhaar with PAN?

Learn how Non-Resident Indians can seamlessly link their Aadhaar with PAN for financial compliance.
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How NRIs can Link Aadhaar with PAN?
CHECK CIBIL SCORE
3 mins read
22-Apr-2024

The Indian government has mandated linking Permanent Account Number (PAN) with Aadhaar for various financial transactions. While this requirement primarily applies to resident Indian citizens, Non-Resident Indians (NRIs) may also have PAN cards for managing their financial ties in India. This article explores the process for NRIs to link their PAN with Aadhaar, if applicable.

A guide to PAN-Aadhaar linking for NRIs

There are a few key things that NRIs need to understand regarding PAN-Aadhaar linking:

  • Requirement: The mandatory linking primarily applies to resident Indian citizens. However, NRIs who wish to file income tax returns in India, open bank accounts, or conduct certain financial transactions may benefit from linking their PAN with Aadhaar.
  • Benefits: Linking PAN with Aadhaar simplifies tax filing, expedites refunds, and streamlines various financial processes in India.
  • Challenges: NRIs might face challenges due to their physical absence from India. Aadhaar enrolment typically requires physical verification, which might not be feasible for NRIs residing abroad.

Here is a breakdown of the linking process for NRIs (if applicable):

Method 1: Online linking (for Aadhaar registered abroad)

Eligibility: This method is only applicable if you have registered for Aadhaar while residing outside India.

Process:

Method 2: Through a Jurisdictional Assessing Officer (JAO)

Eligibility: This method is suitable for NRIs who have not registered for Aadhaar abroad.

Process:

  • Locate your jurisdictional Assessing Officer (JAO) using the Income Tax Department's website
  • Download Form VCP (Voluntary Correction of PAN Data)
  • Fill out the form, mentioning the need to link your PAN with Aadhaar
  • Attach a copy of your PAN card, passport (showing NRI status), and a document as proof of your current foreign address
  • Submit the completed form and documents to your JAO via mail or in person (if visiting India)
  • The JAO will verify your details and initiate the linking process

How to check if your Aadhaar is linked to your PAN card?

You can easily verify if your PAN is linked to your Aadhaar using the following methods:

Income tax e-filing portal: Visit the Income Tax Department e-filing portal and click on link Aadhaar status. Enter your PAN and Aadhaar number to verify the status.

Via SMS: Type UIDPAN followed by a space, then your 12-digit Aadhaar number, another space, and finally your 10-digit PAN number. Send this SMS to either 567678 or 56161. You will receive a reply message from the government service informing you of the linking status.

  • If your Aadhaar is linked, the message will say: ‘Aadhaar is already associated with PAN (number) in ITD database. Thank you for using our services.’
  • If your Aadhaar is not linked, the message will say: ‘Aadhaar is not associated with PAN (number) in ITD database. Thank you for using our services.’

What if you have not linked your Aadhaar with PAN?

Missed the Aadhaar-PAN linking deadline (effective 1st July, 2023), here are the consequences that you might face:

  • PAN inoperative: If you fail to link your Aadhaar with your PAN by the due date, your PAN card will become inactive. This means it cannot be used for financial transactions.
  • Refund delays and lost interest: Any tax refunds that you are eligible for will be put on hold until your PAN is linked. Additionally, you will not receive interest on these delayed refunds.
  • Higher tax withholding: Taxes deducted at source (TDS) on your income will be higher, or a flat 20% whichever is greater. This applies to taxes deducted throughout the year.
  • Increased Tax Collection at Source (TCS): Taxes Collected at Source (TCS) on your payments will be double the applicable rate, or a minimum of 5%, whichever is higher. This has a maximum limit of 20%.
  • Penalty for late linking: There is a non-refundable fee of Rs. 1,000 to link your Aadhaar with PAN after the deadline.

Exemptions for NRIs

Exemptions from Aadhaar-PAN linking (May 11th, 2017 Notification). The Income Tax department has certain exemptions for individuals who are not required to link their Aadhaar with their PAN card. These exemptions apply only if you do not have and have not applied for an Aadhaar number:

  • Residents of Assam, Jammu & Kashmir, and Meghalaya: People living in these specific states are exempt.
  • Non-Resident Indians (NRIs): If you are classified as an NRI under the Income Tax Act, 1961, you are exempt.
  • Senior citizens (Age 80+): Individuals 80 years of age or older during the previous year are exempt.
  • Non-citizens of India: If you are not a citizen of India, you are exempt.
  • Important note for NRIs: This exemption for NRIs applies only if you have not obtained or applied for an Aadhaar Card in India.

Conclusion

While not mandatory for all NRIs, linking PAN with Aadhaar can offer several conveniences for managing financial activities in India. NRIs with existing Aadhaar registration abroad can link it online. However, for those without an Aadhaar card, the process might involve contacting the Jurisdictional Assessing Officer. Remember, staying informed about the latest regulations regarding PAN-Aadhaar linking is essential for NRIs.

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Frequently asked questions

Does NRI need to link PAN with Aadhaar?
Linking is not mandatory for all NRIs. However, it benefits those who file Indian income tax returns, open bank accounts, or conduct certain financial transactions in India.
How can I update my NRI status on PAN card?
You can update your NRI status by submitting Form NRI to the Income Tax Department. This can be done online or by contacting your Jurisdictional Assessing Officer.
Do OCI holders need to link PAN with Aadhaar?
OCI holders are not mandated to link PAN with Aadhaar unless they intend to file income tax returns or engage in financial transactions requiring PAN verification.
Is there any other way to link PAN with Aadhaar?

Yes, you can still link your PAN with Aadhaar even if you missed the deadline. However, a late fee of Rs. 1,000 will apply. You can link your Aadhaar through the Income Tax Department's e-filing portal or by visiting an authorised centre.

Who are exempted from linking Aadhaar with PAN?

Certain groups are exempt from mandatory Aadhaar-PAN linking, but only if they do not have or have not applied for an Aadhaar card. These include:

  • Residents of Assam, Jammu & Kashmir, and Meghalaya.
  • Non-Resident Indians (NRIs) as per the Income Tax Act.
  • Individuals aged 80 years or older during the previous year.
  • Non-citizens of India.

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