The Income Tax Department has deactivated the Permanent Account Number (PAN) cards of more than 16,000 Non-Resident Indians (NRIs) from Uttar Pradesh due to their failure to provide their residential address and non-filing of income tax returns.
The department announced this decision through a tweet.
However, NRIs affected by this deactivation will have the opportunity to reactivate their PAN cards by filing their returns.
According to the Income Tax department, the PANs of NRIs who have not filed income tax returns for three consecutive years or have not informed the income tax assessing officer concerned about their latest residential status have been deactivated.
Vivek Khanna, a former chairman of the Central India Regional Council of the Institute of Chartered Accountants of India, clarified that linking PAN with Aadhaar is not mandatory for NRIs. To reactivate their PAN cards, NRIs and foreign nationals, whose PAN has been rendered inactive due to non-linking with Aadhaar, will need to provide proof of residence to the income tax officer.
Khanna emphasised that an inactive PAN does not imply that it has been permanently blocked. NRIs with inactive PANs can still file their income tax returns. However, they will not receive refunds or interest on refunds until their PAN is reactivated, and TDS (tax deducted at source) will be deducted at a higher rate for those with inoperative PANs.
Uttar Pradesh is a home to around six lakh NRIs and many of their families continue to reside here. A considerable number of NRIs file their income tax returns using their residential addresses in the state. Recognising the significance of NRIs as potential investors, the state government has established a dedicated NRI department. Additionally, preparations are underway to introduce a separate policy aimed at providing maximum facilities to expatriates and foreign investors.
“The deactivation of PAN cards serves as a reminder to NRIs in Uttar Pradesh about their tax compliance obligations. The Income Tax Department encourages them to promptly address the issue by filing their returns and providing the necessary proof of residence to reactivate their PAN cards, thus ensuring smooth and compliant financial transactions,” chartered accountant Rajeev Sharma said.