While it is true that non-resident Indians (NRIs) are not required to have an Aadhaar number, there seems to be some confusion when it comes to linking their permanent account number (PAN) with the UID (unique identity) number.
Many NRIs are under the impression that like other resident Indians if they do not link their PAN with Aadhaar by 30 September 2019, it would become invalid or inoperative. But this is not true.
The mandatory linking of PAN and Aadhaar applies to residents in India.
NRIs, although they are citizens of India, are not eligible for Aadhaar if they have not stayed in the country for more than 182 days or more in the past 12 months.
Only after completion of 182 days of their stay in India in the past 12 months immediately preceding the date of application for enrolment, NRIs can apply for an Aadhaar. This is as per the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act.
Clarifying on whether PAN of NRIs would be blocked for not linking with Aadhaar, the Unique Identification Authority of India (UIDAI) (https://uidai.gov.in/contact-support/have-any-question/291-faqs/your-aadhaar/nri-aadhaar.html
) says, "...mandatory quoting of Aadhaar or Enrolment ID shall apply only to a person who is eligible to obtain Aadhaar number... the requirement to quote Aadhaar as per section 139AA of the Income-tax Act shall not apply to an individual who is not a resident as per the Aadhaar Act, 2016. Moreover, Filing details of the Aadhaar number while submitting Income Tax returns from July 2017 does not apply to NRIs."
As per Section 139AA of the Income-tax Act, every person who is eligible to obtain Aadhaar number shall, on or after the 1st day of July, 2017, quote Aadhaar number, in the application form for allotment of PAN and in the return of income. The above provisions apply to persons who are eligible to get Aadhaar.
Finance minister Nirmala Sitharaman, while presenting her maiden Budget, had, however, proposed to allow NRIs to obtain Aadhaar soon after their landing in India, without waiting for the 180 days mandatory period as residents.
NRIs, who had obtained Aadhaar and are filing tax returns, can link it with PAN through the I-T department's website https://incometaxindiaefiling.gov.in/.
Coming back to the question of what happens if PAN is not linked with Aadhaar on or before 30 September 2019, we need to look at a proposal in this year's Budget. In the Budget 2017, it was mentioned that PAN cards that are not linked with Aadhaar would become invalid.
However, the date for such linking was extended several times even after the judgement from the Supreme Court.
On 31st March this year, the Central Board of Direct Taxes (CBDT) notification extended till 30 September 2019, the date to link PAN with Aadhaar for eligible residents.
Further, individual taxpayers (resident) are mandated to quote and link Aadhaar with PAN. But this condition does not apply to NRIs, who are not eligible to obtain an Aadhaar number.
In addition, this year's Budget had used a word 'inoperative' instead of 'invalid' while referring to non-linking of PAN with Aadhaar. This is being done to make sure that PAN cards used to carry out some transactions earlier, should not become obsolete as it may erase the trails of the transaction and the individual.
"In order to protect validity of transactions previously carried out through such PAN, it is proposed to amend the said proviso so as to provide that if a person fails to intimate the Aadhaar number, the PAN allotted to such person shall be made inoperative in the prescribed manner," the Budget document says.
Marking the PAN not linked with Aadhaar as 'inoperative' instead of 'invalid' has become effective from 1 September 2019. While there is no clarity yet as to how to revive the inoperative PAN, residents who have not yet linked PAN with Aadhaar should not worry about their PAN card becoming invalid.
In short, if you are an NRI and do not have an Aadhaar, then there is no need to fear of your PAN becoming invalid. If you are NRI and have obtained an Aadhaar, then you can link it, if you wish.
But in any case, PAN cards of NRIs will not become invalid for not linking it with Aadhaar. This is because the requirement to quote Aadhaar as per Section 139AA of the Income-tax Act does not apply to an individual who is not a resident (or is an NRI) as per the Aadhaar Act.