Importance of PAN Number under Income Tax
Importance of PAN Number under Income Tax
A PAN card is a significant proof of identification and helps the government maintain transparency in all economic transactions. Whether you plan to open a bank account, make investments, buy property, apply for loans, or file tax returns – you will need a PAN card almost everywhere
When a PAN becomes Inoperative:-
Non-linking with Aadhaar
Consequences of an inoperative PAN due to non-linking:
Refunds of any tax amounts due will not be made.
Interest will not be payable on such refunds.
Tax will be deducted at a higher rate (as per Section 206AA).
Tax will be collected at source (TCS) at a higher rate (as per Section 206CC).
You may face restrictions on financial transactions like opening bank accounts, investing in shares or mutual funds, buying property, applying for loans, and even filing income tax returns.
Using an inoperative PAN can attract a penalty of ₹10,000 per financial transaction under Section 272B of the Income Tax Act.
Reactivating an inoperative PAN: You can reactivate an inoperative PAN by linking it with your Aadhaar, usually after paying a penalty of ₹1,000. It typically becomes operative again within 30 days of successful linking.
Holding Multiple PAN Cards: It is illegal to possess more than one PAN card. If the Income Tax Department detects that an individual has been allotted multiple PANs, they may deactivate the duplicate or extra PANs.
Fraudulent PAN Cards: If a PAN card is found to have been obtained using false documentation, invalid personal details, or for a non-existent person (fake identity), it will be deactivated by the Income Tax Department to curb fraudulent activities.
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