Inoperative PAN is not inactive PAN, clarifies I-T Dept amid concerns on ITR filing

Last date for filing the ITR for AY-2023 is July 31

A permanent account number (PAN) that has become inoperative due to not being linked with the Aadhaar card, is not the same as an inactive PAN, the Income Tax Department clarified on July 18, amidst confusion over income tax return (ITR) filings.

"It is clarified that an inoperative PAN is not an inactive PAN. One may file the Income Tax Return (ITR), irrespective of PAN becoming inoperative," the taxation body said in a statement.

However, there will be consequences of an inoperative PAN, such as the "pending refunds and interest on such refunds will not be issued to inoperative PANs".

Also, the tax deducted at source (TDS) will be deducted at a "higher rate for inoperative PANs", it said. Similarly, the tax collected at source (TCS) will be "collected at a higher rate for inoperative PANs", the I-T Department added.

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Concerns have been raised by certain NRIs/ OCIs regarding their PANs becoming inoperative, although they are exempted from linking their PAN with Aadhaar.
Further, PAN holders, whose PANs have been rendered inoperative due to non-linking of PAN with Aadhaar,…

— Income Tax India (@IncomeTaxIndia) July 18, 2023

Clarification on NRI PANs

The PANs of overseas citizens of India (OCI) or foreign citizens, who may have applied for PAN under resident status and have not updated their residential status before the Jurisdictional Assessing Officer (JAO), have been rendered inoperative, the I-T Department pointed out.

Similarly, the PANs of OCI cardholders or foreign citizens who have not filed ITR in any of the last three assessment years (AYs) have been rendered inoperative, it noted.

"The NRIs (non-residential Indians) whose PANs are inoperative are requested to intimate their residential status to their respective JAO along with supporting documents with a request to update their residential status in the PAN database," the statement said.

Also Read | Inoperative PAN cards distress NRIs

The clarification comes amid the concerns raised by a number of taxpayers, including NRIs, over the filing of ITRs with PANs that have not been linked with Aadhaar. The last date for filing the returns for AY-2023 is July 31, 2023.

Earlier, the deadline for linking the 12-digit Aadhaar number with the PAN card lapsed on June 30.