Recent actions by the income-tax (IT) department to freeze approximately 110 million PAN cards of those not connected to Aadhaar have caused problems for a number of non-resident Indians (NRIs).
Many non-resident Gujaratis (NRGs) who haven't linked their PAN to Aadhaar have had their PAN number deleted. Consequently, NRGs inundate chartered accountants (CAs) with requests for assistance in reactivating their accounts by updating their status as "non-resident" with the IT department.
In order to qualify, a taxpayer must demonstrate that they were in India for fewer than 182 days in a given year.
Explaining the situation, CA Karim Lakhani said, “Those who hold a ‘non-resident’ status need not worry if their PAN-Aadhaar cards aren’t linked. In most cases, people left India as students and now are settled abroad and haven’t visited India in the past few years. As a result, they are yet to update their status as non-residents, resulting in deactivation of their PAN card due to non linkage.”
“Such NRIs are often left out from benefits such as shares, mutual funds, SIPs, insurance, and even interest on pending refunds. They may also face challenges in transferring money from India after selling their property here,” Lakhani explained.
CAs claim that NRIs lack familiarity with the requirements and timelines for PAN-Aadhaar linking. Consequently, NRGs with deactivated PANs will not be eligible to get their income tax return or 20% TDS, nor will they be able to make new investments. Many NRIs file returns under the residency of India.