The income tax department has initiated a crackdown on the use of inoperative Permanent Account Number (PAN), including levying penalties of up to Rs 10,000 for financial transactions using such PAN.
An inoperative PAN is one that has been deemed invalid for taxation and financial purposes.
Says Deepak Kumar Jain, founder and CEO, TaxManager.in, a tax advisory and e-filing portal: “The PAN becomes inoperative primarily when it is not linked with Aadhaar. Other reasons could be that the person is having multiple PAN cards, PAN cards issued using forged documents, wrong or mismatch in personal information, and others.”
Inoperative PAN - What Are The Issues
If your PAN becomes inoperative, it can create quite a few problems.
To start with, you won’t be able to file your income tax return (ITR). Also, any tax deducted at source (TDS) from your income, whether it’s from your salary, interest, or freelance work, will be cut at double the usual rate.
But that’s not the only thing. Everyday financial tasks, such as opening a bank account, investing in shares or mutual funds, or even making payments of large sums of Rs 50,000 and above can become a problem.
Even a task like buying or selling a property can get delayed.
The good news though that you can fix the problem. All you have to do is link your Aadhaar to your PAN and pay the late fee (currently Rs 1,000). Once that’s done, your PAN will become active again in a few days.
To avoid all this stress, it’s a good idea to check if your PAN is linked. It only takes a minute, and it saves you from a lot of trouble later on.
How To Make Your PAN Operative Again
Your PAN will become operative after you link it with your Aadhaar through the income tax portal and pay a late fine of Rs 1,000.
“It can take up to 30 days for PAN to become operative once the linking process is conducted successfully,” says Jain.
In case of multiple PAN cards, one needs to surrender the additional PAN cards and retain only one PAN.
