What to do if you have multiple PAN cards?
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Recently, the government deactivated approximately 1.1 million Permanent Account Numbers (PAN). Most of these were deactivated because more than one was issued to the same person. This is not the first time that the income-tax department has decided to take such action. It carries out periodic exercises to identify fake or multiple PANs issued to one person. With mandatory linking of PAN with Aadhaar, identifying such cases has become easier. Remember that it is illegal to have more than one PAN. If you do, then you should surrender all but one of such numbers. Read about the implication of having more than one PAN and how you can surrender the additional numbers.
Why people may have multiple PANs
There are various circumstances in which a person can have more than one PAN. In most of it is due to lack of knowledge or awareness. Some of the typical reasons are: “When a person wants to make a correction in PAN, he applies for new PAN instead of applying for a correction. It results in having more than one PAN,” said Archit Gupta, founder and chief executive officer, ClearTax. Besides that, “There are chances that when a person applies for a PAN, and it is not received within some time, he reapplies for it. Several women who change cities after marriage apply for a new PAN with their new surname,” added Gupta.
In the recent drive, 1,566 PANs have also been identified as ‘fake’, which means that these were allotted to either non-existent persons or in the names of persons with false identities. “There are people who already have a PAN and they knowingly apply for multiple PANs with mala fide intentions of splitting their income or assets to different PANs; using multiple PANs for taking loans from banks; or entering into financial transactions based on incorrect or fake documents,” said Shailesh Kumar, director- direct taxation, Nangia & Co LLP.
Consequences of having more than one PAN
Whatever the reason, having more than one PAN is illegal. “There is penalty of Rs10,000 under section 272 B of the Income-tax Act, 1961, which can be imposed in case of holding multiple PANs,” said Gupta. Further, “If the person holds multiple PANs for wilful evasion of taxes, the individual can also be liable for prosecution under income-tax laws,” said Kumar. In addition, having multiple PANs can mess up your financial processes and transactions, because in many case you need to provide PAN—such as: while filing income tax returns (ITRs), opening bank accounts, buying and selling motor vehicles and property (especially above Rs50 lakh). In such cases use of multiple PANs can create problems. Suppose person A obtained a PAN in 2012 and filed her income-tax return for FY2012-13 and FY2013-14, using that PAN. In 2014, she lost her PAN and applied for a fresh one instead of getting it reissued. She used the new PAN to file her return for FY2014-15 and FY2015-16. If the income-tax department finds out that A has more than one PAN, it can deactivate one of it, which can create multiple problems.
In the above case, “A can surrender any of the two PANs. But it’s better to retain the older (original) one and surrender the new one,” said Gupta. Apart from that, she can revise the ITRs that were filed using the new PAN. However, “The time limit for revising the returns for FY2014-15 has already gone. So, it cannot be revised. However, the returns for FY2015-16 can be revised,” added Gupta.
Kumar advises that you should surrender the old PAN and continue with the current PAN. He believes that, “Revision of returns may not be required, if the taxpayer has filled in the other necessary information regarding her taxable income and tax liability correctly in the return.”
However, as abundant caution, she can file a letter with the jurisdictional assessing officer, mentioning the surrender of her earlier PAN, and also update the current one that she is using. Further, she should maintain appropriate reasons to support that the use of multiple PANs was not intentional and it was an inadvertent error,” added Kumar. In any case, one of the PAN should be surrendered by A.
How to surrender a PAN
You can surrender a PAN using both online and offline processes.
Online process: The income-tax department has an electronic portal—https://incometax.intelenetglobal.com/pan/pan.asp—for lodging PAN-related grievances through the Aayakar Sampark Kendra (ASK). You can use this portal to submit your grievances pertaining to an application for PAN submitted to either UTI Infrastructure Technology and Services Ltd (UTITSL) or National Securities Depository Limited (NSDL).
One can also surrender the new PAN over NSDL’s portal at https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html. Here you will have to fill and submit a ‘PAN Change Request’ application form by mentioning the PAN that you are using currently. The form also provides space to mention all other PAN(s) that may have been inadvertently allotted to you. A copy of the corresponding PAN cards should be submitted along with the cancellation request.
Offline process: To surrender your PAN offline, you need to apply for a change or correction in your PAN. You can download the form for this from NSDL’s website at bit.ly/2fvnYEN. Mention the PAN you want to continue with on the top of the form and list all the PAN cards that may have been inadvertently allotted to you. Next, submit this form to your nearest UTI or NSDL Tax Information Network facilitation centre. However, before surrendering your PAN, check the status of your PAN on the income tax e-filing website—https://incometaxindiaefiling.gov.in/. Here, click the option ‘Know your PAN’ on the left hand side of the page and provide the necessary details as prompted.
This will let you know whether your PAN is active or has already been deactivated by the department.
Make sure to undertake this activity at the earliest to avoid inviting the wrath of the taxman.