The central government has clarified that it is completely optional for taxpayers to get the new PAN 2.0 if they already have a valid Permanent Account Number (PAN). However, if you happen to find that you have a duplicate PAN then do not panic, immediately surrender it to avoid violating the law. Having said that, if you are not sure whether you have a duplicate PAN issued using your documents, then it might be a good idea to check right now. This is because the government has made clear its intention of removing duplicate PANs from the system and of using technology to catch offenders.
Read below to find out how to check whether you have a duplicate PAN and what to do if a duplicate PAN exists in your name.
The government can track duplicate PAN under the new PAN 2.0 project
The government has the technology necessary to check for duplicate PANs. “As per the provisions of Income-tax Act, 1961, no person can hold more than one PAN. In case a person holds more than one PAN, he/she is obliged to bring it to the notice of the Jurisdictional Assessing officer and get the additional PAN deleted/de-activated. In the PAN 2.0, with the improved systems logic for identification of potential duplicate requests for PAN and centralized and enhanced mechanism for resolving the duplicates would minimize the instances of one person holding more than one PAN,” said the ministry of finance in a press release dated November 26, 2024.
Experts say that the PAN 2.0 has in-built security measures like a dynamic QR code and others which will automatically detect duplicate PAN issuances.
Faranaaz G Karbhari, Counsel, HSA Advocates, says: “With the new PAN 2.0 coming into operation, a QR code will be added to the PAN card making it easier for the government departments to detect if a person possesses more than one PAN card. If a person is found possessing two PANs it will lead to stringent penalties being inflicted on him/her. The QR code will also enable quick scans and more online functions. It is claimed that this will make the entire system digital and give it more security and effectiveness.”
“The new system is expected to include features such as mandatory Aadhaar linkage, real-time validation and advanced data analytics, all of which could potentially help in identifying and preventing duplicate PANs,” says Sandeep Jhunjhunwala, Partner, Nangia Andersen LLP.
What can happen if you do not surrender your duplicate PAN
Jhunjhunwala says if one has a duplicate PAN, it is crucial to address the issue promptly to avoid potential penalties, legal complications and disruptions in financial transactions.
“In case one has a duplicate PAN, the Income Tax Department may impose a monetary penalty of up to Rs 10,000 under Section 272B of the Income Tax Act. To resolve the issue, necessary forms could be filed with PAN service providers such as NSDL or UTIITSL to surrender the duplicate PAN. In addition to surrendering duplicate PAN, it is essential to ensure that the valid PAN is linked to Aadhaar and to verify that it is updated across all financial records, such as bank accounts, investments and tax filings,” says Junjhunwala.
“The income tax act prohibits the possession of duplicate PANs whether acquired on purpose or by accident. Please immediately surrender the additional PAN as a penalty of upto Rs 10,000 can be imposed. The tax department has previously mandated the linking of Aadhar data to individual tax payer ids. Such features along with eKYC will perhaps help prevent duplicate and their detection,” says Rohinton Sidhwa, Partner, Deloitte India.
Avnish Arora, Executive Director, Direct Tax, Forvis Mazars, says, “Before imposing any penalty, tax officers must provide the assessee with an opportunity of being heard. Therefore, if a person voluntarily surrenders a duplicate PAN, they will have first to evaluate the reason for having a duplicate PAN. The action of surrendering duplicate PAN may help establish the bonafide of the person, which may assist in mitigating the potential penalty.
In genuine cases, such as when an individual loses or misplaces their original PAN card and mistakenly applies for a new one instead of simply requesting a reprint, surrendering the duplicate PAN within a reasonable time can be a valid argument against imposing a penalty due to reasonable cause. It is essential to assess the reasons behind obtaining a duplicate PAN; in such genuine situations, penalties should not be enforced.”
How to solve the problem of duplicate PAN
Chartered Accountant Bimal Jain, founder, A2Z Taxcorp LLP, emphasized that many times people are not even aware of a duplicate PAN in their name. “Many times, people take out fake documents including a PAN in someone else’s name and even set up companies, etc. In the past there were many instances where GST fraud, input tax credit fraud, etc happened due to these fake documents and fraudulent companies. Many of these fraudulent companies have been caught with duplicate PANs where the original PAN holder had no idea about his name and details being misused in such a way. So, my advice would be to find out from the jurisdictional assessing officer if any duplicate PAN has been issued in your name and at once request the jurisdictional assessing officer to deactivate the duplicate one.”
Jain further said that if a taxpayer voluntarily comes forward for deactivation of duplicate PAN there will be no repercussions. “No penalty and fine is to be levied if a taxpayer voluntarily come forward and surrenders or asks for deactivation of a duplicate PAN.”
Wriju Ray, Chief Business Officer, IDfy expands on the point of fraudulent usage of PAN as highlighted by Jain. He says: Solving fraud requires that we cleanse the way we issue PAN and the way we link it to Aadhaar. So in that regard it’s a step in the right direction. But there are still fundamental problems that are beyond the purview of PAN. For instance a citizen may have actually provided fake documents to Aadhaar during registration or may have submitted false documents to get their telephone SIM card. Furthermore even if the PAN data is pure, the website / app / company may not be verifying it at all or may not be checking if the user is submitting someone else’s PAN.”
Ray of IDfy highlights an serious problem with PAN. “It is a serious problem because by linking my Aadhaar to someone else’s PAN I can become that person. Things become really hard to differentiate because there are thousands of Ram Sharma’s or Vijay Kumar’s out there so we really can’t just use names to differentiate them. Enhancing this process of linkage is therefore about ensuring that the person is providing ‘live’ selfies and is able to substantiate his/her identity through other data points before the linkage. This is not a very easy task so I welcome any technical enhancements that are made in this regard.”
Chartered Accountant Mihir Tanna, associate director, S.K Patodia, a CA firm, shares his experience about duplicate PAN. “In our case, there was an NRI who took a PAN before 2000 and later around 2006 his family members took another PAN for him using the same documents. So, when he went to change his address on his old PAN card, he was told that since he already has a PAN card issued in his name, he can’t make any changes now to this PAN card. So, we first applied for a change in jurisdiction of the PAN where the duplicate one was issued. Once this change was made, we applied for deactivation of the duplicate PAN.”
Tanna says you can check if you have a duplicate PAN by either approaching the jurisdictional assessing officer or using the e-filing ITR portal’s ‘PAN status check’ functionality. The PAN status check functionality can be accessed on the income tax e-filing portal. (115735061)
Source: https://eportal.incometax.gov.in/iec/foservices/#/pre-login/verifyYourPAN
Tanna also says that practically he faced a situation where Aadhaar was linked with the duplicate PAN. “In this situation we deactivated the duplicate PAN and then again had to link the original PAN with Aadhaar,” he says.
Karbhari says: “Considering that having more than one PAN card is unlawful as per the provisions of the Act, it is strongly advised that people possessing duplicate PAN Cards should surrender any such duplicate PAN Cards at the earliest. People can easily surrender such duplicate PAN Cards by following the due procedure provided therein for surrendering duplicate PAN Cards. The other way around is to bring it to notice of the Jurisdictional Assessing officer and get the additional PAN deleted/de-activated.”
