Multiple PAN Card Issue: Problems & How to Solve It? (As per Income Tax Act in India)

Multiple PAN Card Issue: Problems & How to Solve It? (As per Income Tax Act in India)

The Permanent Account Number (PAN) is a crucial document for Indian taxpayers, and having more than one PAN card can lead to legal complications. This article will highlight the problems caused by holding multiple PAN cards and explain how to resolve the issue as per the Income Tax Act in India.

What is a PAN Card?

A PAN card is a unique 10-digit alphanumeric number issued by the Income Tax Department of India to track financial transactions and ensure tax compliance. Every individual, business, or entity in India is required to hold only one PAN card. Possessing multiple PAN cards is illegal and can result in penalties.


Problems with Multiple PAN Cards

  1. Legal Violation and Penalties:
    According to Section 139A of the Income Tax Act, holding more than one PAN is a violation of the law. Under Section 272B, offenders may face a penalty of ₹10,000 for each additional PAN.
  2. Confusion in Tax Filings:
    Multiple PANs can create discrepancies in your income tax returns (ITR). This may lead to issues while claiming tax refunds or during tax assessments, increasing the chances of being scrutinized by the Income Tax Department.
  3. Issues with Financial Transactions:
    Owning multiple PAN cards can cause confusion in financial records, affecting your credit score, bank accounts, and investment portfolios. This could result in complications when applying for loans or making investments.
  4. Risk of Identity Theft:
    Unused or unreported PAN cards can be misused by others, leading to identity theft or fraudulent transactions in your name, which could cause significant financial damage.

How to Resolve the Issue of Multiple PAN Cards?

If you have accidentally obtained multiple PAN cards, follow these steps to rectify the issue:

  1. Identify the Active PAN:
    Determine which PAN is actively being used for income tax filings, banking transactions, and investments. The active PAN is the one you should retain.
  2. Surrender the Additional PAN Card(s):
  • Online Method:
    • Visit the NSDL or UTIITSL portal.
    • Navigate to the “PAN Surrender” section.
    • Fill out Form 49A (Request for New PAN Card or Correction/Changes in PAN Data).
    • Select the option to surrender the additional PAN and provide the details.
    • Submit the form and complete the verification process.
  • Offline Method:
    • Write a letter to your Assessing Officer (AO) requesting the cancellation of the extra PAN card(s).
    • Mention the PAN card number you wish to retain and attach a copy of the PAN to be surrendered.
  1. Track the Status:
    After submission, you can track the surrender request using the acknowledgment number provided by the NSDL or UTIITSL.
  2. Ensure PAN-Aadhaar Linking:
    The Government of India mandates the linking of Aadhaar with PAN. This helps streamline tax filings and avoids confusion over duplicate PANs.
  3. Consult a Professional:
    If you are unsure how to proceed, it is advisable to seek assistance from a Chartered Accountant (CA) or a tax consultant to ensure the process is handled smoothly.

Consequences of Not Surrendering Duplicate PAN Cards

  • Fines & Penalties: Not surrendering an extra PAN can attract fines of up to ₹10,000 under Section 272B.
  • Legal Action: Holding more than one PAN card is a punishable offense under Indian law and can lead to prosecution in severe cases.
  • Financial Discrepancies: You may face issues with financial institutions, including discrepancies in your credit score, bank accounts, or loan applications.

Key Takeaway

It is crucial to ensure that you have only one PAN card as per the Income Tax Act. If you find yourself holding multiple PAN cards, surrender the extras immediately to avoid legal and financial complications.


FAQs

Q1: Is it illegal to have multiple PAN cards?
Yes, as per Section 139A of the Income Tax Act, holding more than one PAN card is illegal.

Q2: What is the penalty for holding more than one PAN?
A penalty of up to ₹10,000 can be imposed under Section 272B for holding multiple PANs.

Q3: Can I surrender my extra PAN card online?
Yes, you can easily surrender your extra PAN card through the NSDL or UTIITSL portal.


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By adhering to the guidelines outlined in the Income Tax Act, you can resolve the issue of multiple PAN cards and ensure smooth financial transactions and tax filings.

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