Income Tax Department imposes massive penalty for using inactive PAN

The Income Tax Department has taken strict action against the inoperative PAN (Permanent Account Number). The department has imposed a massive penalty of upto Rs. 10,000 on individuals using inactive PAN cards for financial transactions.

Using an unlinked PAN card with an Aadhar card or multiple PAN cards simultaneously will make them inoperative. If you use an inactive PAN, you may be fined for every financial transaction. This includes things like opening a bank account, investing money, buying property, applying for a loan, or even filing your income tax return. The Income Tax Department will charge penalties for these actions.

In order to make tax administration smoother, the Income Tax Department has ordered compulsory linking of the PAN card with the Aadhaar card. If you don’t do this, your PAN will become inactive, and you won’t be able to use it for financial activities.

Section 272B: Penalty for failure to comply with the provisions of section 139A

If a person, who is required to ensure that the permanent account number has been duly quoted or authenticated fails to do so, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten thousand rupees for each such default.

This means if you quote inoperative PAN while Opening a bank account, investing, buying property, applying for a loan, or even filing your income-tax return with an in-operative PAN, you may be slapped with a penalty of Rs. 10000.

How Does PAN Become Inactive?

PAN becomes inoperative when not linked to Aadhaar or if someone has multiple/duplicate PANs. Failure to respond to repeated notices about discrepancies (KYC, name mismatch, etc.) can also trigger suspension from Tax Department.

How to Check if PAN is Active?

• Visit: https://www.incometax.gov.in/iec/foportal/
• Go to Verify PAN Status
• Enter you PAN, Date of Birth, Name and Mobile Number
• Provide OTP  sent on mobile Number
• Your Pan Status will be shared.

What to do if PAN shows Inoperative?

PAN is inoperative due to non-linking of Aadhar: Link the PAN to Aadhaar. A fee of Rs. 1000 is applicable.

Duplicate PAN: Surrender the Duplicate PAN to the Income Tax Department.