Aadhaar not mandatory for NRIs to file tax returns

Aadhaar not mandatory for NRIs to file tax returns

Issac John

Published: Mon 19 Jun 2017, 8:00 PM

Last updated: Mon 19 Jun 2017, 10:53 PM

Non-resident Indians remain exempted from the mandatory requirement of quoting a 12-digit unique identification number called Aadhaar to file tax returns in India effective July 1, Government of India officials and experts on the topic clarified.
Since only residents of India are entitled to get the identification number as per the Aadhaar Act, NRIs are not eligible to apply for this biometric identity card, said officials.
"So the July 31 deadline to comply with the rule of obtaining an Aadhaar card for filing Income Tax returns does not apply in the case of non-resident Indians," said Bharatbhai Shah, Convener of NRI Cell, Indian Business and Professional Council, Sharjah, said.
However, Aadhaar will be made compulsory for those NRIs who had resided in India for more than 182 days in aggregate in the past 12 months, Shah said.
Shah clarified that a resident is an individual who had resided in India for a period or periods amounting in all to 182 days or more in the 12 months immediately preceding the date of application for enrollment. Accordingly, the requirement to quote Aadhaar as per Section 139AA of the Income tax Act shall not apply to an NRI who had stayed in India less than 182 days in the preceding 12- month period.
Shah said as the July 31 due date for filing tax return for financial year 2016-17 is close by, NRIs who are required to file tax returns in India have been in a panicky state as confusion prevailed in the absence of enough clarity on the topic.
"On the one hand, it was said to be mandatory for all to obtain an Aadhaar Card to file tax returns, and on the other hand, NRIs are deemed not qualified under the rule to apply for the card. However, the Ministry of Finance has cleared this widespread confusion with its latest notification," Shah said.
Abhishek Gautum, under secretary of Department of Revenue, Ministry of Finance, has clarified in a circular that the requirement of Aadhaar number for filing tax returns is not applicable to "an individual who does not possess the card and is a non-resident as per the Income Tax Act, 1961."
"Foreign citizens and individuals above the age of 80 years at any time during the previous year are also exempt from this requirement," Gautum said.
According to the Finance Act 2017, it is mandatory to enroll for Aadhaar to file tax returns in India or apply for a permanent account number or keep the existing PAN active effective July 1.
James Mathew, group CEO of Crowe Horwath, said Aadhaar is compulsory only for those NRIs who had stayed in India for more than 182 days in aggregate in the past 12 months. This means that Indian expatriates living in their home country for more than the stipulated number of days will have to obtain the biometric identification number.
Meenakshi J. Goswami, commissioner of income tax (media & technical policy) and central board of direct taxes' official spokesperson, had said in a statement that such mandatory quoting of Aadhaar shall apply only to a person who is eligible to obtain an Aadhaar number. As per the Aadhaar Act 2016, only a resident individual is entitled to obtain Aadhaar.
The Indian government has made it mandatory for all existing resident Indian bank account holders to provide their Aadhaar numbers to their banks by December 31, 2017. If they fail, the account will no longer be operational, says a notification from the revenue department.
Providing Aadhaar has also been made mandatory for opening a new bank account.
Aadhaar is also made mandatory for availing benefits of various social welfare schemes.
Permanent account numbers not linked to Aadhaar cards will also become invalid after December 31.
Aadhaar is a 12-digit unique identification number issued by the Indian government to every individual resident of India. The Aadhaar project was initiated as an attempt towards having a single, unique identification document or number that would capture all the details, including demographic and biometric information, of every resident Indian individual.
Currently, there are several identity documents in India including passports, permanent account numbers, driving licences and ration cards. The Aadhaar card will not replace these identification documents but can be used as the sole identification proof when applying for other things.
- issacjohn@khaleejtimes.com

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