Loan Fraud via PAN Duplication: What You Need to Know to avoid Department Notices

In March 2025, a street egg seller named Prince Suman from Damoh, Madhya Pradesh, who was earning less than Rs 1 lakh annually, was stunned to receive a GST notice asking him to pay Rs 6 crore. He had never conducted any such transactions in his life. Unfortunately, incidents like these are no longer rare. Across India, ordinary people such as lock-makers, homemakers, students, farmers, etc., are receiving tax or GST notices worth crores for financial activities they never engaged in. The main cause of these notices is PAN card fraud and duplication.

A PAN card is a crucial document issued by the Government of India. It serves as a unique identifier for taxpayers and allows the Income Tax Department to track an individual’s financial activities. In addition to monitoring tax-related details, the PAN card is widely accepted as valid proof of identity and date of birth.

When someone fraudulently obtains and misuses your PAN, they can open fake accounts, apply for loans, or carry out illegal financial transactions in your name. As a result, the actual PAN holder may receive income tax or GST notices for transactions they never authorized, causing distress and legal complications.

One of the reasons PAN duplication is becoming so common is due to everyday carelessness that people often overlook. Many users unknowingly expose their PAN details while uploading documents to unverified websites or handing over photocopies during hotel check-ins, SIM card activations, or informal loan applications. Responding to fake emails, messages, or calling fake customer care numbers also puts sensitive PAN information at risk. In some cases, the misuse happens through data leaks from organizations that legitimately store your PAN but fail to secure it.

How to Identify Unauthorized Use of Your PAN Card

Below are the steps by which you can check if your PAN card has been misused:

• Step 1: Go to the credit bureau website to check your credit score.
• Step 2: Search for the option to check your credit score.
• Step 3: Enter the required details, consisting of your financial information.
• Step 4: Verify the OTP.
• Step 5: Your credit score will be on the screen.

It will give you an idea of whether your PAN has been misused or not.

If someone suspects that their PAN has been misused or if they receive a tax or GST notice for transactions they did not make, they should act immediately. The first step is to identify the issue by regularly monitoring your credit report, CIBIL score, and Form 26AS to detect any unauthorized activity. In case any discrepancy is noticed, the next step is to file an FIR at the local police station or report it online through the National Cybercrime Reporting Portal at, cybercrime.gov.in.

Once an FIR is filed, the Income Tax Department must be notified through one of the official portals. If your PAN was issued by NSDL or UTIITSL, you can report the grievance via the Aayakar Sampark Kendra PAN Grievance Portal at incometax.intelenetglobal.com/pan/pan.asp. If your PAN was issued via NSDL, complaints can be submitted through, www.tin-nsdl.com under the “Customer Care” section. If you are registered on the Income Tax e-filing portal, log in at www.incometax.gov.in/iec/foportal, go to the “Grievances” or “Helpdesk” section, and submit a complaint along with any supporting documents.

If the fraud involves a bank or any financial institution, the individual must notify the concerned institution immediately, providing a copy of the FIR. If the issue remains unresolved for more than 30 days, the matter can be escalated to the RBI Ombudsman via the Complaint Management System (CMS) portal at cms.rbi.org.in.

Failing to act on such incidents can have serious consequences. The Income Tax Act, under Section 272B, imposes a penalty of Rs 10,000 for holding more than one PAN. Moreover, victims could become liable for unpaid loans or financial frauds committed using their PAN. This can severely damage their credit score, making it difficult to get credit cards or loans in the future.

While individuals must remain alert and cautious, the increasing number of PAN misuse cases signals a need for structural reform. The Central Board of Direct Taxes (CBDT) could take several measures to strengthen protection. First, a dedicated grievance redressal tab specifically for PAN misuse should be created on the Income Tax portal to streamline the reporting process. Additionally, PAN holders should receive real-time alerts which are similar to banking transaction alerts, whenever their PAN is used for high-risk financial activities. This could enable quicker action and prevention.

Moreover, the CBDT should coordinate with agencies such as RBI, UIDAI, credit bureaus, and police departments to detect and halt PAN-related frauds before they rise. Public awareness campaigns are also essential to educate citizens on safe practices when sharing PAN details, how to identify fraud attempts, and where to report misuse.