IT Department Targets Inactive PANs, Imposes Rs. 10,000 Penalty Per Transaction:

IT Department Targets Inactive PANs, Imposes Rs. 10,000 Penalty Per Transaction The Income Tax Department has taken strict action against individuals using inactive Permanent Account Numbers (PANs) for performing their financial transactions. In this context, the department has given a warning and also imposed a penalty of up to Rs 10,000 per transaction on individuals using such PANs. This step is part of a larger effort to make sure everyone follows the rule of linking their PAN with Aadhaar. The aim is to systematise tax administration and to restrain tax evasion.

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Massive Penalties on Inactive PANs

It has been confirmed by a senior tax official that individuals caught using inoperative PANs will be penalised with a massive amount. Penalties for using inoperative PANs will be imposed mainly on the following transactions:

• Opening or operating a bank account
• Investing in mutual funds or the stock market
• Buying property
• Applying for loans
• Filing income-tax returns (ITRs)

Transactions mentioned above performed using inactive PANs can penalise you up to Rs. 10,000 under Section 272B of the Income Tax Act, the department's warning.

PANs Turn Inactive When Not Linked to Aadhaar

Previously, it was made compulsory to link PAN with Aadhaar by the Income Tax Department. PANs turn inactive when not linked to Aadhaar within the specified deadline. This means that after that, PANs will not be able to be used to perform financial transactions or activities related to tax. Moreover, individuals using multiple PANs, which is illegal as per the rules, are also under the eye of the department. Individuals found using duplicate or unlinked PANs will not only be penalised by the department but also suffer several legal consequences.

AI and Data Analytics Tools Used to Spot Rule Violations

The department has adopted several AI and data analytics tools to spot transactions performed using inactive PANs. These tools assist:

• Spotting defective ITR filings
• Refuse refund claims.
• Track high-value transactions across bank accounts, investments, and property registrations.

A senior officer of the IT department says, "This digital crackdown will leave no room for misuse. We’re now automatically detecting mismatches and blocking fraudulent or inoperative PANs from being used further."

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What to Do to Avoid a Penalty?

Several experts from the tax department have recommended that taxpayers verify and link their PANs to Aadhaar if they have not done so yet. The action can be performed online at the official portal of Income Tax e-filing. Conclusions for not linking PAN with Aadhaar:

• Suspension of PAN
• Freezing of bank and demat accounts
• Rejection of refund claims
• Inability to file ITRs