Top Mistakes While Applying for an NRI PAN Card

While applying for a permanent account number (PAN) as a Non-Resident Indian (NRI), you might end up making some errors that could lead to application rejection or delays. The errors might seem minor, but they can have serious consequences. Some common NRI PAN mistakes include wrong form selection, mismatched details in documents, inaccurate information, failing to provide an overseas address, and many others.

However, by carefully following the guidelines and double-checking every information against your official documents, you can avoid the risk of NRI PAN application rejection. In this blog, we will discuss the mistakes an NRI makes while filing a PAN application. We will also learn the consequences associated with the mistake and the ways to avoid them.

Using the Incorrect Form

One common mistake that an NRI makes in the PAN application form is filling out the wrong form. If you use the wrong application form based on your citizenship status, your application will be marked as defective and rejected.

Consequences

• Your application may get rejected.
• There will be delays in processing time.
• You will have to fill out and submit a new application.
• End up submitting the wrong set of documents.

How to Avoid

It's vital to understand the forms you need to use. There are two types of application forms for a PAN card for NRI: Form 49A and Form 49AA. All Indian citizens, NRIs, entities situated in India, and any other unincorporated entity that forms in India need to fill out Form 49A.

On the other hand, all foreign residents paying taxes in India, including persons of Indian origin (PIO), overseas citizens of India (OCI), and companies situated outside India but operating in India, must fill out Form 49AA.

Choosing the Wrong Citizenship Category

One of the most common and costly mistakes that an NRI makes while filing the NRI PAN card application form is choosing the wrong citizenship category. Several applicants select the "Indian Resident" category without knowing or understanding that this option is only for individuals who are physically staying in India for tax and legal purposes.

If you hold an Indian passport, select the "Indian Citizens Residing Abroad" option. Also, if you hold a foreign passport and an OCI card, choose the "Foreign citizen" category. This error may look minor, but it can attract long-term issues.

Consequences

• Your PAN card status may not match in the Income Tax Database.
• Issues with Aadhaar exemptions, where your PAN may be wrongly marked as "inoperative".
• Wrong tax treatment, leading to higher TDS on your Indian income.
• Issues with banking and investment, especially while opening NRO/NRE accounts or investing in mutual funds.

Many NRIs realize this mistake too late, that their PAN has errors during tax filings or bank verification, which can result in the need for a PAN correction application, extra documentation, and unnecessary delays.

How to Avoid

Select the right citizenship category during your application to avoid future issues related to tax, banking, and compliance.

Mismatched Supporting Documents

This is another simple and easy-to-overlook mistake. While applying for a PAN card as an NRI, OCI, or foreign citizen, it is vital to ensure that the information you provide on the PAN application and supporting documents matches each other. Mismatches may often occur due to minor errors that can be easily avoided

Consequences

• Processing of any tax refunds may be delayed.
• Issues with successful ITR filing or e-verification, leading to potential issues with tax compliance.
• It will prevent successful Aadhaar-PAN linking, causing your PAN to become inoperative and incurring penalties.
• Document mismatch can lead to frozen bank accounts, rejected high-value transactions, or issues with loan applications, as PAN is used for KYC verification by the bank and other financial institutions.

How to Avoid:

• Cross-check all information before the final submission.
• Submit only the valid documents specified by the Income Tax Department.
• Fill out the form accurately, avoid abbreviations, use only black ink, and ensure every field is filled.

Signature Errors

Not signing in the specified fields, missing signatures, and even overwriting are some common mistakes. It can lead to rejection or delays in the processing time and can cause major problems with financial transactions and verification processes. Since a signature is used as the primary means of identifying the verification for various financial activities, here are some issues you might face:

Consequences

• Rejection of loan or credit card applications.
• Issues with opening new bank accounts
• Problems with filing income tax returns or receiving tax refunds
• Complications with the legal and government documentation process, which require signature matching.

How to Avoid

Ensure that you fulfill the signature requirements as per the instructions. Signatures near the photograph sections must be paid special attention to. Re-check where and how to sign on your PAN card application before the final submission.

Not Updating Your PAN to NRI Status After Relocating Abroad

If your PAN was issued while you were in India and you later move abroad without updating its status, you could face various complications.

Consequences

• Increased TDS on your Indian income
• Issues with your PAN-Aadhaar linkage
• Incorrect residential status in your tax records
• Challenges with your NRE/NRO accounts and investments.

How to Avoid

Submit a PAN correction form to:

• Update it to NRI PAN status
• Include your foreign address
• Refresh your email and mobile number

Tip: Changing your PAN status to NRI ensures accurate taxation and prevents unnecessary banking and compliance issues.

Errors in Your Date of Birth or Parents' Name

Though it may seem like a minor administrative error, incorrect personal details can lead to significant delays in PAN verification and future corrective measures. Even small inaccuracies in your name, your father's name, or your date of birth can cause major complications later on. An NRI ends up making these common mistakes:

• Mistyped birth year
• Incorrect date formatting (confusion between DD/MM and MM/DD).
• The name on your passport doesn't match the name registered in the PAN application.
• An abbreviated or incomplete version of your father's name compared to official records.

Consequences

• Banks might refuse KYC verification.
• Tax returns could mismatch with records.
• Processing of mutual fund investments and capital gains may be delayed.
• A PAN correction application will be mandatory, which can involve additional time, documentation, and verification.

How to Avoid

Always ensure that the name, father's name, and date of birth you enter match exactly the information on your passport. This careful approach can save you from extensive corrections down the line.

Selecting the Wrong Communication Address

Many NRIs mistakenly choose an Indian communication address, even when living abroad. This small error can lead to significant delivery problems.

Consequences

• Your PAN card could be sent to an incorrect address.
• The courier may be returned as undelivered.
• You might experience delays of 30-45 days or more.
• Reapplying for dispatch could be necessary, causing more inconvenience.

This frequently occurs when NRIs use their parents' Indian addresses without realizing that the PAN will be physically sent there.

How to Avoid

When you apply for an NRI PAN card, you should always select "Communication Address Outside India" if you reside outside India. This will ensure:

• Fast tracking
• Avoidance of delivery failures
• Accurate international delivery

Final Thoughts

After reading the blog, you can avoid the common errors that can cause rejections and delays in NRI PAN applications. Some errors that may seem minor can be the reason for your PAN application rejection. You need to give great attention to every detail and ensure consistency between the application form and supporting documents. Even after paying extra attention, if you are not sure about the accuracy, seek assistance from an expert at Savetaxs.

At Savetaxs, we understand the unique challenges NRIs face when dealing with legal and financial requirements in India. We have a team of experts who ensure to make every legal process easy and stress-free for you. You can avoid errors, delays, and issues with compliance by getting our expert-driven services. Contact us right away, and you can ensure accuracy, reliability, and complete peace of mind from us.