Why will PAN is Inoperative from July 1, 2023?

India’s tax authority made it mandatory for all taxpayers to link their PAN, an account number that connects all taxpayer transactions, with Aadhar, an identification number that serves as proof of identity and residence.

The deadline for linking PAN card with Aadhaar was June 30, 2023. Failure to link both cards by this date makes the PAN ‘inoperative,’ making it challenging for individuals to carry out various financial transactions in India. However, Indians living abroad who missed the deadline can still link the cards by paying a penalty.

How to Check if PAN is inoperative?

Below are the steps to check if your PAN card is valid or invalid:

Step 1: Go to the Income Tax e-filing website.

Step 2: Click the ‘Verify Your PAN’ option under the ‘Quick Links’ heading on the homepage.

Step 3: Enter your PAN, name, date of birth and mobile number and click the ‘Continue’ button.

Step 4: Next, enter the OTP sent to your mobile number and click the ‘Validate’ button.

Your PAN status will be displayed.

Consequences of when PAN card is inoperative:

The consequences of having an inoperative PAN card are as follows:

Limited Access to Financial Services

With an inoperative PAN, NRIs may face difficulties in availing tax or banking services that require the provision of a valid PAN number. This can include filing Tax Return, accessing Bank Accounts, and conducting various financial transactions.

Non-processing of Income Tax Refunds

When your PAN is inoperative, the processing of income tax refunds may be halted. This means NRIs  may not receive any tax refunds until your PAN is made operative again.

Increased TCS and TDS Rates

Certain incomes and expenditures may attract higher TCS and TDS. This can result in additional tax burdens on NRI’s part.

Restricted Investment Options

An inoperative PAN can limit an NRI’s ability to invest in various financial instruments such as fixed deposit, mutual funds and other NRI investment options offered by banks and financial institutions.

How NRIs can activate their PAN?

Step 1: Know Your Jurisdictional Assessing Officer’s Email Address

•  Click here to know your assessing officer. 

• Enter details like your PAN and mobile number (either overseas or Indian mobile number). After that you will receive an OTP on your number. 

Once your details are verified, the email ID of your jurisdictional assessing officer will be displayed on the screen. Note down this email address as you will need it for the next step.

Step 2: Write the Email to Your JAO (Jurisdictional Assessing Officer)

Now you need to send an email with supporting documents (copy of PAN card & copy of passport showing period of residence outside India) to your respective jurisdictional officer requesting him/her to update your residential status in the PAN database and activate your PAN. Here is a suggested email format and content for NRIs and OCIs, respectively.

Disclaimer: The above information is shared for information purpose only and shall not be construed as Professional advise. You may contact us or schedule a call with us for any help.

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