With the deadline for linking Aadhaar and Permanent Account Numbers (PAN) set to expire tomorrow, Indians both at home and abroad have been scrambling to follow government guidelines.
The expert consensus when it comes to NRIs linking the two is that it is better to be safe than sorry. Here’s all NRIs need to know about whether to link their Aadhaar card with their PAN or not.
Under the Income Tax Act, it is not mandatory for NRIs to link their PAN and Aadhaar numbers. However, NRIs who have not linked their PAN and Aadhaar must confirm their non-residential status on the Income Tax portal online. If the Income Tax department is not informed about the residential status and PAN-Aadhaar is not linked, the PAN may be deactivated, experts say.
Anup Bhasin, co-founder and CEO of Star NRI Services, said that they have been encouraging NRI clients with an Aadhaar card to link it with their PAN. He added that the company, which was launched in 2021 to take care of issues and problems faced by NRIs in India, has made the linking procedure part of their onboarding process for new clients.
“NRIs are currently exempt from this requirement (to link Aadhaar-PAN). However, we should look at the government's rationale behind this; essentially this is being done to strengthen the KYC process and monitor financial transactions under the Prevention of Money Laundering Act. So if clients already have an Aadhaar, we encourage them to link it to their PAN as ‘good compliance’," Bhasin told Connected to India
“The government can change its stance at any time and expand the ambit of these provisions to NRIs, so our advice is to comply now rather than be in a rush later,” he added.
For resident Indians, a failure to link Aadhaar with PAN will lead to the latter becoming inoperative, leaving citizens unable to file income tax returns, carry out NSE or BSE transactions and several other financial services. NRIs with Aadhaar cards and PANs may also be unintentionally caught in this net so it is better to err on the side of caution, sources said.
Mohit Gopwani, a Chartered Accountant working for SBNRI, a firm which offers investment, taxation and documentation services to NRIs all over the world, said that NRIs should link their Aadhaar and PAN “to avoid any potential tax or legal complications in India”.
SBNRI also stated that linking PAN with Aadhaar is a smart move for NRIs who are looking to return to India in the future or who come back to India for a portion of the calendar year.
“You can link your PAN Card with Aadhaar after it has become inoperative. Your PAN Card will become active once again as soon as it gets linked to the Aadhaar Card. The statutory penalty/fees shall be levied when the person will link their Aadhaar to PAN after it becomes inoperative,” SBNRI stated.
Those concerned can link their PAN with Aadhaar on the Indian Income Tax e-filing portal. The Indian government has also provided two ways to verify whether people’s PAN and Aadhaar are linked.
The first way is to use the ‘Link Aadhaar Status’ tab on the Income Tax e-filing portal. The second way is to check your PAN-Aadhaar linking status through sending an SMS to 567678 or 56161 and typing “UIDPAN” followed by a space and your Aadhaar number and PAN separated by a space. For instance, you need to follow the following format: UIDPAN
You can also activate inoperative PANs through paying the fine through the e-Pay Tax functionality section on the portal.