Indians based in the UAE must check if their residential status is mentioned correctly in India’s PAN (Permanent Account Number) database before filing Income Tax Returns.

Though the PAN remains the same, personal details including residential status may require correction when a person moves abroad, and carries out important financial transactions in India from their new location.

Non-residents under India’s IT law are exempt from mandatory PAN-Aadhaar linking. Yet, when NRIs had their PANs marked inoperative, it was understood that their non-resident status was not recorded by the Income Tax Department.

Affected NRIs were asked to submit their residential-status details and supporting documents to the Jurisdictional Assessing Officer (JAO).

The IT Department has clarified that an inoperative PAN is not a cancelled PAN. An affected taxpayer can still file an ITR, but may face restrictions such as the TDS and TCS rates becoming higher, and tax processing getting delayed. Their tax refunds and related interest could also be withheld. – editor@nrifocus.com