'Inoperative PAN Is Not Inactive PAN': IT Dept Clarifies On NRIs Issues, Check Details

The Income Tax department on Tuesday provided clarification in response to concerns raised by specific Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) regarding the inoperability of their PAN cards. The department has outlined two requirements that must be met for PAN cards to become inoperative: filing an income tax return at least once within the past three years and informing the Jurisdictional Assessing Officer about their residential status. Furthermore, the department has presented a solution to address this issue.

The last date to link PAN with Aadhaar was June 30, 2023. If you have not linked your PAN with Aadhaar by this date, your PAN has become inoperative from July 1. This means that you will not be able to use your PAN for certain financial transactions.

“Concerns have been raised by certain NRIs/ OCIs regarding their PANs becoming inoperative, although they are exempted from linking their PAN with Aadhaar.

Further, PAN holders, whose PANs have been rendered inoperative due to non-linking of PAN with Aadhaar, have expressed concern over certain consequences of PAN becoming inoperative,” IT department said in a tweet.

In this context, the following clarifications may be noted:

1. ITD has mapped the residential status of NRIs in case they have filed the ITR in any of the last 3 AYs or they have intimated their residential status to the Jurisdictional Assessing Officer (JAO). The PANs have been rendered inoperative, in case any one of the above-mentioned criteria is not met.

The NRIs whose PANs are inoperative are requested to intimate their residential status to their respective JAO along with supporting documents with a request to update their residential status in the PAN database.

Details of JAO can be found at – https://eportal.incometax.gov.in/iec/foservices/#/pre-login/knowYourAO2.

2. 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.

The OCIs/foreign citizens are requested to intimate their residential status to their respective JAO along with supporting documents with a request to update their residential status in the PAN database.

3. It is clarified that an inoperative PAN is not an inactive PAN. One may file the Income Tax Return (ITR), irrespective of PAN becoming inoperative.

Only following are the consequences of ‘inoperative’ PAN:

• Pending refunds and interest on such refunds will not be issued to inoperative PANs.
• TDS will be required to be deducted at a higher rate for inoperative PANs in accordance with section 206AA.
• TCS will be required to be collected at a higher rate for inoperative PANs in accordance with section 206CC.