Moment guide · FY 2026-27

I am managing PAN and Aadhaar compliance as an NRI

Do NRIs need to link PAN with Aadhaar?

NRIs are exempt from linking PAN with Aadhaar — the linking requirement applies to residents. But you still need an active PAN to file returns, claim TDS and claim DTAA benefits, and without one, TDS is deducted at 20% under section 206AA. Keep your NRI status marked in PAN records so banks and tenants apply the right TDS rates.

The #1 trap

Letting the PAN lapse or failing to mark NRI status — without a PAN, TDS is deducted at 20% under section 206AA, and your bank, broker and tenant will all apply the penal rate. Also, NRIs who link PAN with Aadhaar anyway are fine, but the requirement itself applies to residents, and the PAN is needed to claim DTAA benefits and lower-TDS certificates.

Joseph, NRI in the UK managing Indian investments

Joseph moved to the UK in 2022 and is a non-resident of India. He is exempt from the PAN-Aadhaar linking requirement, which applies to residents, so his PAN remains valid without linking. He uses the PAN to file his Indian return every year, to claim the TDS deducted by his bank on NRO interest and by his tenant on rent, and to claim the India-UK DTAA benefit on his dividend income. If Joseph's PAN had been deactivated or he had not quoted it, his bank and tenant would have deducted TDS at the penal rate of 20% under section 206AA instead of the applicable rates, and the excess would be stuck in his 26AS until filing. He updated his PAN application to reflect his NRI status with NSDL, so the records show his foreign address and his tax status, which matters when he applies for a lower TDS certificate under section 197 on TRACES. His colleague, now a resident again, had to link PAN with Aadhaar within the prescribed deadline, because the exemption is tied to non-resident status. Joseph also keeps his PAN handy when claiming treaty benefits, because both the DTAA claim and the Form 10F reference the PAN. If he ever becomes an ordinary resident, he will re-check the linking obligation. Joseph keeps the PAN card, the status update acknowledgement and his UK address proof together. A quick call with us dials in the final figure. Joseph also checks that the PAN is quoted on every Indian transaction — the NRO account, the rental agreement, the property purchase and the mutual fund folio — because a single unquoted transaction can attract the 20% TDS under section 206AA. If he opens a new bank account or demat account as an NRI, the PAN is mandatory and the address proof is the foreign address. The NRI status marked with NSDL means the TDS rates applied by the payers follow the non-resident table, and a certificate of lower deduction under section 197 references the PAN. If he later returns and becomes a resident, he updates the PAN record with the Indian address and re-checks the Aadhaar linking requirement, which applies from the year he is a resident. A quick call with us dials in the final figure.