Holding More than One PAN? Know Legal Risks and Heavy Penalties under Section 139A
In India, it is not legal to hold more than one Permanent Account Number (PAN) under Section 139A of the Income Tax Act, 1961. Neither common people nor companies are allowed to hold more than one PAN number. In this article, we will discuss all the key consequences that one can suffer if holding more than one PAN.
What is a PAN?
PAN stands for Permanent Account Number. It is a unique ten-digit alphanumeric number issued by the Income Tax Department. The number is typed on a laminated plastic card commonly known as a PAN card. A PAN card provides every individual in India with a unique identity. Most of the finance-related works in India require PAN; hence, it is considered a crucial document in the nation.
Reasons for Holding More than One PAN
- Generally, when people have mistakes in their PAN, they apply for a new PAN instead of applying to correct these mistakes. This results in having two PANs.
- When a person does not receive his/her PAN after some time of applying, he/she apply for a new PAN, instead of waiting for at least a month. This results in having two PANs. Many individuals are not aware that the person who has applied for a PAN can even check its status online. However, they reply the same.
- As we all know, in India surnames of women change after their marriages; they hold the surnames of their husbands. So they apply for new PANs in order to update their surnames in them instead of applying to change their surname in the existing PAN only.
- Many masterminds even apply for a second PAN to defraud the government and avoid paying tax. This is a major illegal activity and can lead to a massive penalty.
Consequences for Holding More than One PAN
According to the provisions of the Income Tax Act, one holding more than one PAN is liable to pay a penalty of Rs. 10,000 under section 272B of the Income Tax Act, 1961. If the person has more than one PAN and has not opted in intentionally, then he/she should immediately surrender the additional PAN card/cards.
The Ministry of Finance, in a statement, said, “As per the Income-tax Act, no individual is allowed to hold more than one PAN. If a person holds multiple PANs, they must inform the Jurisdictional Assessing Officer and request that the additional PAN be deactivated or deleted. Under PAN 2.0, the system has been enhanced with improved logic to identify duplicate PAN requests. This centralised and advanced mechanism will help minimise instances of individuals holding more than one PAN.”
Section 272B of the Income Tax Act covers penalties under two types of non-compliance. Firstly, if a person fails to comply with the requirements of Section 139A, which mandates obtaining a PAN and quoting it in specified documents and transactions (for instance, tax returns and certain financial transactions). Secondly, if a person, required to quote or intimate their PAN, provides a number that they know or believe to be false or do not believe to be true. In both the aforesaid conditions, the person is liable for the penalty of Rs. 10,000 levied by the Income Tax Department.
