Non-resident Indians (NRIs) according to the Income-Tax Act, 1961, are exempt from linking PAN with Aadhaar if they do not have Aadhaar.

NRIs whose PAN has become inoperative can file an application with their Jurisdictional Assessing Officer stating that linking of PAN and Aadhaar is not required for them, and also submit copies of their PAN and passport showing details of stay outside India. Based on their request, and after due diligence by the Assessing Officer, the PAN will be made operative.

The Jurisdictional Assessing Officer details can be found out about an assessee by visiting the following link:-

https://eportal.incometax.gov.in/iec/foservices/#/pre-login/knowYourAO

Details Required:

• Copy of PAN Card (Self-attested)
• Copy of Passport (Self-attested)
• Details of Stay outside India.

How long does it take for the change of residential status?

Once the jurisdictional assessing officer is satisfied with the information provided by the taxpayer, they will initiate the process of updating the status from resident to NRI. The process may take 30 days from the receipt of all information that the officer finds satisfactory. However, the time period may vary from case to case.

Can an NRI file ITR with an inoperative PAN?

The Income Tax Department has clarified that an NRI can still file income tax return even if the PAN becomes inoperative. However, the consequences of an “inoperative” PAN are:

• Pending refunds and interest on such refunds will not be issued to inoperative PANs
• TDS will be required to be deducted at a higher rate for inoperative PANs in accordance with Section 206AA
• TCS will be required to be collected at a higher rate for inoperative PANs in accordance with Section 206CC

Under Income Tax laws, residents are required to link their PANs with Aadhaar using biometric authentication. However, non-residents are exempt from this requirement and are not obligated to obtain an Aadhaar card.

The deadline for linking PAN with Aadhaar was June 30, 2023. Starting from July 1, 2023, PAN has been deemed inoperative for individuals who failed to link it with Aadhaar. Individuals who have not linked their PAN with Aadhaar can still do so after paying a penalty.

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The assessee had shown advance of Rs.3.50 crores in the year in respect of which TDS was deducted by the corresponding party. Certainly, the assessee is not eligible of the amount of TDS deducted on the amount of advance received by the assessee as the corresponding income was not offered to tax.

The next controversy arises when the assessee can claim the benefit of TDS i.e., the year in which it offers corresponding income in the income tax return.

The advance money was shown as income in the Financial Year 2016-17 corresponding to 2017-18 by the assessee. In this regard, the Court noted as per the Act that Credit for tax deducted at source and paid to the Central Government shall be given for the assessment year for which such income is assessable. The Court ordered that the assessee should be allowed the benefit of TDS credit in the AY 2017-18 subject to the verification.

To Download Order, click here.

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship.

The information on this site is not intended to be a substitute for professional advice.”

The post TDS credit not available if income was not disclosed appeared first on Chartered Accountancy Firm | Y G C O & Co.