India’s Income Tax (IT) department has been issuing advisories to citizens on the need to link their PAN (Permanent Account Number) card with the Aadhar card, before the upcoming deadline of March 31, 2023. Failing to link the two cards will mean that a person’s PAN card will become inoperative. But does this deadline apply to non-resident Indians (NRIs), too?
Here is all you need to know.
WHAT IS A PAN CARD?
A PAN card or Permanent Account Number card is a card which contains a unique 10-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax (IT) Department in India, to any person who applies for it or to whom the department allots the number without an application.
PAN enables the department to link all transactions of the person with the department.
WHAT IS AN AADHAAR CARD?
Aadhaar is a 12-digit individual identification number issued by the Unique Identification Authority of India (UIDA) on behalf of the Government of India. The number serves as a proof of identity and address, anywhere in India.
NRIs are not mandatorily required to have an Aadhaar card. So, the deadline to link PAN card with Aadhaar would apply to you depending on whether you have an Aadhaar card.
I have an Aadhaar card
Even though NRIs are not mandatorily required to have an Aadhaar card, if you do have the card, you should link it with your PAN card before the deadline.
“If they have an Aadhaar card, they will need to link the PAN card with it before March 31, or their PAN card will become inoperative,” Jain said.
“If that happens, they will not be able to file their income tax returns going forward and even pending income tax returns will not be processed, because the PAN is linked to the previous returns. The PAN card is also linked with your Indian bank account, and if you are investing in the stock market or making any other financial investment, your PAN card will not work, so you will not be able to complete any financial transactions. Also, your KYC (Know Your Customer) records will expire, and you will not be able to update them without an active PAN card. These are all the practical aspects that you need to keep in mind when it comes to linking the two cards,” he added.
How to link your PAN with Aadhaar:
These are the steps you need to follow to link the two cards:
1. Visit www.incometax.gov.iec/foportal
2. Under the ‘quick links’ section, click on ‘Link Aadhaar’ option.
3. Next, enter Aadhaar number and PAN, and pay late fee of INR1,000 (Dh44.64) through ‘E-pay Tax functionality’ after following the instructions on screen.
4. Once payment is complete, visit ‘Link Aadhaar’ section again and enter your name, mobile number, Aadhaar number and PAN.
5. Verify the information by selecting ‘I agree to validate my Aadhaar details’ option and click on ‘Link Aadhaar’ option.
6. Enter the OTP received on your mobile number and click on ‘Validate’ to complete the linking process.
The deadline to link PAN card with Aadhaar card has been extended a few times in the past. Earlier, the late fee was INR500 (Dh22.32), which was then increased to INR1,000 (Dh44.64).
Consequences of not linking your PAN with Aadhaar
- Your PAN will become inoperative.
- Filing ITRs will not be possible.
- Pending returns will not be processed.
- Pending refunds cannot be issued.
- Pending proceedings as in the case of defective return, cannot be completed.
- Tax will be deducted at a higher rate.
I do not have an Aadhaar card
If you do not have an Aadhaar card, you can simply update your PAN card details through the online system, according to Jain, and do not need to worry about the deadline to link PAN card with Aadhar.
“When you visit the Income Tax Department’s online portal – eportal.incometax.gov.in – you will simply need to access your profile and select your status as a non-resident. Once you do that, the government will know that you are falling under the exempt category,” Jain said.