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The below content is purely for informational purposes and is not intended to constitute advisory of any kind. Please note, these are in-depth articles which are best viewed on large screen devices like laptops, desktops and tablets. The position reflected in this article has been updated as of January 15, 2024.

As a Non-Resident Indian (NRI), you may sometimes question the necessity of having a Permanent Account Number (PAN) card and an Aadhaar card. Managing finances in India often involves the submission of key documents including a PAN card and an Aadhaar card. While a PAN card is essential for tax filing in India, an Aadhaar card is used to comply with Know Your Customer (KYC) regulations and procedures. This article details how having a PAN card and an Aadhaar card can be beneficial for NRIs.

 

Benefits of PAN card for NRIs

PAN is a unique, 10-digit alphanumeric identification number issued by the Income Tax (IT) Department of India. It serves the purpose of tracking your financial activities in India. If you earn income, invest, or engage in financial transactions within India, then having a PAN card can help you significantly.

As per the prevailing Indian IT regulations, an NRI requires a PAN card for the following situations:

  • File Income Tax Return (ITR) in India;
  • Open a bank accounts, including NRI bank accounts and NRI demat accounts;
  • Invest in mutual funds, debentures, or bonds exceeding ₹50,000;
  • Buy gold worth more than ₹2 lakh;
  • Purchase/sell an immovable property exceeding ₹10 lakh;
  • Deposit of cash exceeding ₹50,000 in any one day with a bank;
  • Deposit/withdrawal of cash exceeding ₹20 lakh in a Financial Year (April-March) with a bank.

 

Basis the Income Tax Act, a PAN Card is mandatory if you are required to file an ITR in India. This would happen when your income in India exceeds:

  •  ₹2.5 lakh (under the old tax regime); or

  • ₹3 lakh (under the new tax regime).

 

Applying for a PAN card as an NRI

You can apply for a PAN card online through the official website of the IT department or through a few authorised service providers in India. You can apply for a PAN card by submitting Form No. 49A along with the required documents. If you don’t have an Indian address, you can provide your foreign address in the application.

Did you know?

As per Section 272B of the Income Tax Act, 1961, if you have two Permanent Account Numbers (PAN), you are liable to a pay a penalty of ₹10,000.

Benefits of Aadhaar card for NRIs

An Aadhaar card is issued by the Unique Identification Authority of India (UIDAI). It is a 12-digit unique number that serves as a proof of identity and address. As an NRI, while having an Aadhaar card is optional, it is widely accepted as a proof of identity, address and date of birth. An Aadhaar card is commonly used by NRIs for:

  • Opening NRI bank accounts;

  • Re-KYC/activation of your dormant accounts;

  • Buying/selling a property;

  • Filing ITR.

 

How to apply for an Aadhaar card as an NRI

As an NRI, you can book your Aadhaar card appointment via the UIDAI website or through your nearest Aadhaar Seva Kendra. You will need to provide your Indian passport that will serve as a proof of identity, address and NRI status. As per the latest UIDAI guidelines, along with the requisite documentation, you also have to submit a completed Aadhaar enrolment or update form.

To know more, you may visit the UIDAI website.

Did you know?

As an NRI, you need to provide an email ID and an Indian mobile number for your Aadhaar card applications. You can provide a non-Indian mobile number; however, no text message or SMS will be sent to that number for any related alerts or notifications.

NRI children who are minors (with valid Indian passports) are also eligible to obtain an Aadhaar card. As per the UIDAI guidelines, it is mandatory to also provide a documented proof of age. In case of children born after October 1st 2023, a birth certificate is compulsory.

 

Linking Aadhaar card and PAN card

Non-residents who have updated their residency status to NRI on the income tax portal, do not need to link their Aadhaar and PAN cards. NRIs can voluntarily link their Aadhaar and PAN cards by paying the specified fee on the Income Tax portal.

Quick Tip

To update your residential status with the IT department, you must:

  1. Login to the income tax portal

  2. Go to ‘My profile’ section

  3. Change your residential status to a non-resident

It is important to note that if you do not update your residency status with the Income Tax department, your PAN may get inoperative.

Here's what happens when your PAN is marked as inoperative:

  • You won't receive pending refunds and the associated interest on them.
  • Tax Deducted at Source (TDS) will need to be deducted at a higher rate as per section 206AA.
  • Tax Collected at Source (TCS) will have to be collected at a higher rate as per section 206CC.

To make your PAN operative, please inform your local Jurisdictional Assessing Officer (JAO) about your NRI status by sharing the necessary documents (such as self-attested copies of passport, PAN card, etc.). As an NRI, if you voluntarily want to link your Aadhaar card and PAN card, then you have to pay a specified fee.

Conclusion

As an NRI, having a PAN card and an Aadhaar card helps you conduct seamless financial and banking transactions in India. PAN card is required when you have income sources in India, or you intend to invest in the country. It is mandatory for filing ITR in India. An Aadhaar card is widely accepted by financial institutions as a proof of identity however, it is not mandatory for you to have one.

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Frequently Asked Questions

Is it mandatory for me to have a PAN card and an Aadhaar card as an NRI?

A PAN card is mandatory for you, if you want to file tax returns in India. An Aadhaar card is not mandatory, however, it is used as a proof of identity when opening a bank account, applying for a driving license, filing ITR, etc.

How can an NRI apply for a PAN card?

If you wish to apply for a PAN card, you will have to:

  • Visit the official website of Tax Information Network (TIN) of the IT Department.
  • Fill the online application form and upload the requisite documents (photograph, proof of identity and address etc.) and pay the fees.
  • Alternatively, you can download Form 49A from the income tax website or your bank’s website and submit the requisite documents to the designated National Securities Depository Limited (NSDL) address. 

Do I need to be physically present in India to apply for a PAN card?

No, you need not be present in person or be in India while applying for a PAN card. You can apply for the same through the income tax portal.

Do I need to be physically present in India to apply for an Aadhaar card?

You can book an appointment to apply for an Aadhaar card online, even before you arrive in India. However, you need to be physically present in India to complete your biometric authentication.

Can I update my PAN and Aadhaar details as an NRI?

Yes, you can update your PAN details (address, name, etc.) on the income tax portal. In case of an Aadhaar, you can update the address on the UIDAI portal or at the nearest Aadhaar Seva Kendra with the relevant documents. For changes in other demographic and biometric information, it is compulsory to visit the nearest Aadhaar centre. You can visit their respective official websites for more details.

Disclaimer:

The contents of this article/infographic are meant solely for informational purposes. The contents are generic in nature and are not intended to serve as a substitute for specific advice on any matter whatsoever. The information is subject to updation, completion and verification and the applicable norms may keep changing materially from time to time. This information is also not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to applicable laws or would subject ICICI Bank Limited/its affiliates to any licensing or registration requirements. ICICI Bank Limited/its affiliates and their representatives shall not be liable for any direct or indirect losses or liability incurred arising in connection with any decision taken by any person on the basis of this content. Please conduct your own due diligence and consult your financial advisor before making any decision. Terms and conditions of ICICI Bank and third parties apply. ICICI Bank is not responsible for third party services. Nothing contained herein shall constitute or be deemed to constitute an advice, invitation or solicitation to avail any products/ services of third parties.