Here is why NRIs need not worry about Aadhaar card

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Indian expatriates living across the globe need not worry about any possible problems with their financial or income tax transactions in India for not having an Aadhaar card, recent clarifications issued by the Government says.

Despite the exemption previously announced by the Indian authorities, many NRIs expressed their concerns about disruption of transactions in NRE bank accounts in India and filing of income tax returns.

Their concerns are justified due to the following reasons:

  • As per recent government orders, PAN card should be linked to Aadhaar card by June 30, 2017 and failure to link them makes PAN redundant.
  • As PAN card was already made mandatory for holding a bank account, NRIs are concerned that this could affect their banking transactions and their accounts may be blocked.
  • A redundant PAN will also affect NRIs who invest in Indian stock market, for which PAN is mandatory.
  • PAN is already mandatory to make cash deposits above Rs50,000 with banks in India.

However, latest notifications and clarifications from Government officials have further alleviated these concerns.

Here are some of the clarifications on this subject:

Announcement from Ministry of Finance

According to the notification issued by the Central Government on May 11, the requirement of quoting of Aadhaar shall not apply to NRIs for filing of return of income and for making an application for PAN with effect from July 1, 2017.

Screenshot of the press release from Ministry of Finance

  • The above press release along with Gazette Notification is available on this link.

Announcement from Central Board of Direct Taxes

India’s Central Board of Direct Taxes (CBDT) had also made a similar announcement.

Screenshot of the press release from Central Board of Direct Taxes

  • The above press release is available on this link.

Clarification on official website

The official website of Unique Identification Authority of India (UIDAI), the body responsible for Aadhaar cards has the below question and answer on FAQ section:

Screenshot from UIDAI website

  • Here is the link to above statement on UIDAI website.

Statements from senior officials

A senior official at Indian Embassy in UAE said that there was no change in the previous announcement.

“It is still valid because NRIs are not eligible for Aadhaar as per the law. Otherwise, this law has to be amended,” Gulf News reported on Sunday citing Dinesh Kumar, counsellor, community affairs at the Indian Embassy.

Earlier, Dr. Ajay Bhushan Pandey, CEO, Unique Identification Authority of India (UIDAI), said in a telephone interview from New Delhi that instead of Aadhaar, the departments could get a declaration from the NRI that, being an NRI, he or she was not eligible for Aadhaar card.

The Indian Embassy in Abu Dhabi had also announced that Aadhaar was not mandatory for obtaining a driver’s licence or a SIM card in India.

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The government started giving these exemptions as technically NRIs are not eligible for Aadhaar and onus was on the government departments to give exemptions to NRIs in this regard.

The Aadhaar Act 2016 defines resident as “an individual who has resided in India for a period or periods amounting in all to one hundred and eighty-two days or more in the twelve months immediately preceding the date of application for enrolment,” which cannot be true in case of NRIs.

  • You can see the link to Aadhaar Act 2016 here.
Published on 18 June 2017

2 Comments

  1. prem kumar on

    Dear sir, iam working as technician with NRI status …I don’t have adhar card bcz at that time no body was asking this. I have pan linked to indian banks.

    my issue is : due to lack of information … I have Fix deposits in indian saving bank account before my NRI staus and that are continuing till now . now I have NRI status so what …how much tds will be cut in my indian saving bank fix deposits.

    please advise.
    to contineue that account what need to do?
    to avail more tax what need to do.

  2. Hi Premkumar,

    The income from regular fixed deposits is taxable (if interest is above tax limits). You cannot claim tax deduction for this as the money was not generated from abroad.

    As per law, you are supposed to change your bank account type if your resident status has changed.

    If you don’t have Aadhaar card, please check with your bank what needs to be done. They may ask you to open an NRO account and transfer this amount to a new NRO Fixed Deposit.

    Note that NRO account is also taxable (only NRE is exempted). You may incur slight loss if the FD account is closed prematurely. Also the interest rates may not be the same now. But it is better to consult with bank in order to avoid future issues.

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