PAN is a very important identification number required for financial and tax purposes. The instances which makes a PAN inoperative shall be excluded at all costs otherwise consequences can be tedious for the taxpayer as it will deny the taxpayer its refund amount or will hold income tax processing of the taxpayer etc.
PAN will become inoperative if PAN is not linked with Aadhaar and shall face the following consequences as a result of PAN becoming inoperative:
- Income tax returns will not be processed.
- No purchase of mutual funds/shares/deposits etc will be allowed.
PAN i.e. Permanent Account Number is a unique ten-character alphanumeric identifier number issued by the Income Tax Department to every individual who applies for the same upon verification of documents. PAN is used to keep a track of financial transactions done by an Individual or an entity.
Clarification of Income Tax Department on PAN of NRIs or OCIs:
For NRIs: ITD has mapped the residential status of NRIs in case they have filed the ITR in any of the last 3 AYs or they have intimated their residential status to the Jurisdictional Assessing Officer (JAO). The PANs have been rendered inoperative, in case any one of the above-mentioned criteria is not met.
For OCIs: The PANs of OCIs/foreign citizens, who may have applied for PAN under resident status and have not corrected/updated their residential status to the Jurisdictional Assessing Officer (JAO) or have not filed ITR in any of the last 3 AYs, have been rendered inoperative.