I get many enquiries from our NRI clients that their mutual fund brokers are asking them to update their NRI status with Indian income tax department. Also, income tax department is also sending them emails on regular basis to link Aadhaar with the PAN. But no one is telling that what actions NRIs should take to let income tax department know that they can’t link Aadhaar with their PAN as having Aadhaar is not mandatory for them or what needs to be done to update their NRI status with Indian Income Tax department.
Emails received from the mutual fund brokers and income tax department say:
“If you do not link your Aadhaar with your PAN, on or before 31st March 2022, a higher tax may be deducted at source on your income distribution or capital withdrawals. Future transactions, both financial and non-financial, may also be restricted. We perform a periodic verification of PAN-Aadhaar linkage with Income Tax database and hence we request you to ignore this message in case you have done the linking recently. If you are not required to comply with linking of your PAN with Aadhaar by virtue of being an NRI, you may please take the guidance from your tax advisor and have your status updated with Income Tax / NSDL suitably, on or before 31st March 2022”.
OR
“Not linking PANwith Aadhaar* is sameas not having PAN!! Don’t delay anymore & link now!
*as per sub section (2) of section 139aa, every person unless exempted, who has been allotted PAN and eligible to obtain Aadhaar is liable to link PAN with Aadhaar number”.
Regarding this I contacted income tax department, and according to them,till further clarifications issued in this regard,NRIs should update their NRI status in their profileby login to their online income tax account through e-filing portal of Indian Income Tax Department.Basically, they should follow below steps:
- Login to their Online income tax account using following link: https://eportal.incometax.gov.in/iec/foservices/#/login
- Go to My profile
- Update address, contact details and most importantly residential status as an NRI.
I have mentioned this many times earlier also that updating online income tax profile is very important now. Department has started sending notices through emails which has to be replied within specified time period. Ignoring these notices may result in demands and penalties. I have seen many practical cases like this. Similarly, one should file his income tax returns even if he is an NRI, it will help him to keep his records clean with Indian Income Tax department.
Let me tell you more about Aadhaar and should NRIs enrol for it when they come to India.
1. What is an Aadhaar?
Aadhaar is a 12 digit individual identification number issued by the Unique Identification Authority of India on behalf of the Government of India.It is issued to the residents of India who have to provide his/her demographic and biometric information during the enrolment process. The process is totally free of cost.
2. Why it is important?
It is an Identity proof which is applicable everywhere in India.It is helpful to different agencies to authenticate person’s identity. It is unique enough to eliminates duplicate and fake identities. Also, helps in e-verification of income tax returns and various forms. It helps in opening bank accounts, getting Passport, pension funds,provident funds disbursements etc. Also people who are eligible for governmentrelated subsidiescan take benefit of it giving Aadhaar as identity proof which make whole process controlled and hassle free.
3. Who shall have Aadhaar?
Every individual who is resident as per Aadhaar Act shall get an Aadhaar.Aadhaar is not mandatory for NRIs.
4. Who is resident as per Aadhaar Act?
Resident as per Aadhaar Act means an individual who has resided in India for a period orperiods amounting in all to 182 days or more in the twelvemonths immediately preceding the date of application for enrolment. Please note, definition of Resident as perAadhaar Act is different from Income Tax Act or FEMA Act. Here 182 days stay requirement is not for any particular financial year or calendar year rather it should be considered within any 12 months. If during the period of 12 months (starting from any month), sum of days in which an individual stayed in India is more than 182 days then he shall enrol for Aadhaar.
5. Are NRIs eligible to enrol for Aadhaar?
Yes, NRIs are also eligible to enrol for Aadhaar. Indian Passport is a mandatory Proof of Identity for Aadhaar enrolment for NRIs.
6. How to get an Aadhaar?
An individual needs to an enrolment form which can be filled online or offline. Submit this form along with an identity and an address proof. Once form is approved you need to provide biometric data which includes Photograph, finger print impression and Irish scan. For this you have to visit a nearest Aadhaar Enrolment centre. Once this process is done you will get an Enrolment slip with 14 digit enrolment number. You can check status of your application online through the enrolment number. Once application is approved, you will get an Aadhaar by post. You can explore various options available through visitingAadhaar official website:
7. What is the process to link Aadhaar with the PAN?
To link Aadhaar with PAN you shall go to the following link:
https://eportal.incometax.gov.in/iec/foservices/#/pre-login/bl-link-aadhaar
Fill details like PAN number, Aadhaar number, Name as per Aadhaar, Mobile number. Mobile number mentioned here can be different from that number which is linked to Aadhaar. This mobile number will be used to send OTP only for purpose of completing this linking process. Once process is complete.
You can check linking status through following link:
https://eportal.incometax.gov.in/iec/foservices/#/pre-login/link-aadhaar-status
So, in nutshell, it is not mandatory for NRIs to have Aadhaar. In case, they have Aadhaar then they shall link it with their PAN. Most important is that they shall update their online income tax profile mentioning their residential status as anNon-resident.
Please note: Still provisions related to foreign citizen, NRIs and OCIs regarding Aadhaar is not much clear.We are expecting that as time will pass, concernedauthorities will issue more and more clarifications on this topic through their circulars and notifications.
Disclaimer: This article is solely based on my views, experience and interaction I had with Indian Income Tax Department. People may have different views on above.
Please do let me know if you still have any questions related to above. You can write to me at ushma@nricaservices.com or call/Whatsapp me at +91 9910075924.
