The Income Tax Department (ITD) has asked non-resident Indians (NRIs) whose Permanent Account Numbers (PANs) are inoperative to intimate their residential status to their respective Jurisdictional Assessing Officer (JAO) along with supporting documents. This comes after concerns were raised by certain NRIs/Overseas Citizens of India (OCIs) regarding their PANs becoming inoperative, although they are exempted from linking their PAN with Aadhaar.
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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.
In this context, the income tax department issued these clarifications:
1. Income tax department has mapped the residential status of NRIs in case they have filed the ITR in any of the last 3 assessment years (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. Details of JAO can be found at - https://eportal.incometax.gov.in/iec/foservices/#/pre-login/knowYourAO
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.
Details of JAO can be found at - https://eportal.incometax.gov.in/iec/foservices/#/pre-login/knowYourAO
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 (as per tax department):
i. Pending refunds and interest on such refunds will not be issued to inoperative PANs.
ii. TDS will be required to be deducted at a higher rate for inoperative PANs in accordance with section 206AA.
iii. TCS will be required to be collected at a higher rate for inoperative PANs in accordance with section 206CC.
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