Inoperative PAN : Income Tax Department Issues Clarifications for NRIs, OCIs

Several non-resident Indians (NRIs) and Overseas Citizenship of India (OCIs) have not been able to file their Income Tax Returns due to ‘inoperative’ PAN Cards.  Even though they are exempt from linking their PAN with Aadhaar, some NRIs and OCIs have raised concerns about their PANs becoming inoperative.

In light of this, the following clarifications are provided by the Income Tax Department on its Twitter handle:

1. The Income Tax Department has mapped the residential status of NRIs based on their filed income tax returns (ITR) in the last three assessment years or if they have informed their Jurisdictional Assessing Officer (JAO) about their residential status. PANs have been rendered inoperative if any of these criteria are not met. NRIs with inoperative PANs are requested to inform their respective JAOs about their residential status along with supporting documents, requesting an update in the PAN database.

Details of JAO can be found at: https://eportal.incometax.gov.in/iec/foservices

2. PANs of OCIs and foreign citizens who may have applied for PAN under resident status but have not corrected or updated their residential status with the JAO or filed an ITR in the last three AYs have been rendered operative. OCIs and foreign citizens are requested to inform their respective JAOs about their residential status along with supporting documents, requesting an update in the PAN database.
3. It has been clarified that an inoperative PAN differs from an inactive PAN. Regardless of PAN becoming inoperative, individuals can still file their Income Tax Returns (ITR). Only the following are the consequences of an ‘inoperative’ PAN:

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