PAN card for NRIs - Does it need an updated residential status? 

Your PAN card is a crucial document for filing taxes, opening bank accounts, and investing in various types of assets.

When you become an NRI, your residential status changes, and it is essential to update this change in your PAN card as well.

Wondering why?

Let’s understand the role of the PAN card for NRIs and why updating it is necessary.

Why is it necessary to update a PAN card?
 

The Income Tax Department (ITD) deactivated outdated PAN cards from 1 July 2023. If your PAN card was not updated to reflect a change in your residential status, it will likely become inoperative.

Besides activation, the need to update the PAN card is due to the following reasons -

1. Filing income tax returns (ITR)
 

As an NRI, if you have any income earned in India, you might have to file your ITR to pay the applicable taxes or to claim refunds (if applicable). ITR filing requires the updated PAN number, without which your returns would not be processed.

2. Utilising the benefits of Double Tax Avoidance Agreement (DTAA)

 

The DTAA allows you to avoid double taxation on the same income. For instance, if you earn an income in India, you can pay tax in India and claim a tax credit in your residential country.

To claim DTAA benefits, you will need to quote your PAN number, which should be updated.

3. Optimising TDS and TCS
 

Some incomes are eligible for Tax Deduction at Source (TDS) and Tax Collection at Source (TCS). This means that a specified percentage of tax is deducted from such income before it is credited to you.

The TDS and TCS rates are higher for inoperative or un-updated PAN cards. Thus, an update is required to enjoy lower rates.

4. Avoiding legal complications
 

If your PAN card is not updated, you might receive a notice from the ITD. Such notices can also result in penalties and legal proceedings, so it is recommended to update the PAN card to avoid these legal consequences.

5. Conducting financial transactions in India
 

If you invest in India or open an NRI bank account, you will need to provide an updated PAN card to complete the Know Your Customer (KYC) process. 

How to update PAN card for NRIs?
 

You can update your PAN card online or by visiting the Assessing Officer (AO) of the Income Tax Department (ITD). The process is as follows -

1. How to update PAN card Online?
 

You can update the PAN card for NRIs online through the income tax portal. Here are the steps -

a. Step 1 - Visit the official website of the ITD.

b. Step 2 - Log in to your account using your username and password. If you are a new user, register and create your account under the NRI status.

c. Step 3 -Go to the ‘My Profile’ section available on your dashboard.

d. Step 4 -Click on ‘Edit’ and change your residential status to ‘Non-Resident.’

You can also email the AO to update your residential status. To find the email ID, click on the ‘Know your AO’ option in the ‘Quick Links’ section on the ITD home page.

2. How to update PAN offline?
 

If you are in India, you can schedule an appointment with the AO and apply to update your residential status. You can locate the office address of the AO through the ‘Know your AO’ option.

Documents required to update the PAN card for NRIs
 

Along with the application to update the residential status, you must submit a list of specific documents. These documents are as follows -

1. PAN card copy
2. Any one document from the following -

a. A passport copy that shows your stay in India and confirms that you are an NRI

b. Copy of another nation’s citizenship or taxpayer identification number

c. If you are a Person of Indian Origin (PIO) or an Overseas Citizen of India (OCI), a copy of the PIO or OCI card issued by the Indian government

Once you apply for the update and submit the necessary documents, your PAN card will be updated and made operative within a month.

Update your PAN card for smoother financial transactions
 

Right from investing in India to filing your returns, an operative PAN card for NRIs is a must. The updating process is straightforward and can be completed online from anywhere.

With NRI services from IDFC FIRST Bank, you can use the services of a personalised relationship manager to help update your PAN card for KYC. Therefore, choose IDFC FIRST Bank to open an NRI bank account or to invest in various avenues, and ensure that you provide your updated PAN details. If your PAN card for NRIs is inactive, receive comprehensive guidance and activate the card today for efficient financial management.