What NRIs Need to Know About Aadhaar and PAN Linking

Here is a lowdown on the new rules concerning Aadhaar and PAN


The changes in the Finance Act 2017 that came into effect from July 1, created an atmosphere of confusion regarding linking of Aadhaar and PAN card among NRIs. As per the Finance Act of 2017, quoting Aadhaar was compulsory for filing returns and for applying or retaining PAN card. The NRIs have found it difficult to get the Aadhar cards made and a few media reports suggest that they are not eligible for the Cards as yet.

Aadhaar is a 12 digit number issued by Unique Identification Authority of India (UIDAI) while PAN is ten digit alphanumeric number given by the income tax department. With the linking, the government is trying to create a universal identity that can serve as both identity and address proof anywhere in India. With this, the government is also trying to negate the problem of people having multiple PAN cards and filing tax returns with those.

Here is a lowdown on whether NRIs need to link their PAN and their Aadhaar card– and whether it is required to file income tax.

When do NRIs need to file Income tax returns?

You need to file income tax returns when the income exceeds the exemption limit of Rs 250000 during a financial year, and if you have a short term or long term capital gain on sale of investments and assets in India. You also need to file income tax returns when you want to claim any refund and want to carry forward any losses in India.

How can NRIs apply for PAN card?

You can apply for PAN through an online application on the National Securities Depository Limited or UTITSL portal.  UTITSL is finance service provider in India. The application fee payment can be done through credit/debit card, demand draft or net banking. For credit/debit/netbanking transactions, you would need PIN (Personal identification Number) from your respective banks.  Once the application is accepted, you would need to send the supporting documents through courier/post to NSDL/UTITSL. After the documents are received, the application is processed. If you need to make changes on existing data, it can be done through the same portal.

Do NRIs need a PAN card?

You would need a PAN card only if you have taxable income in India. Any income earned or accrued in India during a financial year is taxable. If you do not have a PAN card, according to the new rule of Securities and Exchange Board of India (SEBI), you cannot do share trading by depository or broker, or invest in mutual funds. You require your PAN for transactions in India- such as opening an Non Resident Ordinary bank account, to purchase property in India, vehicle deals, investment in bank FDs.

Do NRIs need an Aadhaar card?

As per Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act 2016, only a resident who has been staying in India for about 182 days or more is eligible for Aadhaar. Which, by default, exempts you from PAN and Aadhaar linking process.

In a notification on May 11, 2017, the Central Board of Direct Taxes (CBDT) clarified the categories of individuals who are exempted from compulsorily linking their PAN with Aadhaar.

According to CBDT, Section 139AA of the Income Tax Act is not applicable to the following individuals: Those categorized as Non-resident Indians as per the Income Tax Laws, Not a citizen of India, of age 80 years or more at any time during the tax year and residents of the states of Assam, Meghalaya and Jammu and Kashmir

Can NRIs apply for Aadhaar Card?

You need to have been a resident of India for 182 days or more to apply for Aadhaar. It cannot be issued from outside India.

What do you do if you are an NRI with an Aadhaar card?

You can follow the general procedure for linking the two. The process is as below:

  1. Log in to the e-Filing portal of the Income Tax Department
  2. On logging, a pop up window will appear prompting you to link your PAN card with Aadhaar card.
  3. Details such as name, date of birth and gender will already be mentioned as per the details submitted at the time of registration on the e-Filing portal.
  4. Verify the details on screen with the ones mentioned on your Aadhaar card.
  5. If the details match, enter your Aadhaar card number and click on the “link now” button.
  6. A pop-up message will inform you that your Aadhaar card has been successfully linked to your PAN card.

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