The Permanent Account Number (PAN) is a unique, identifier crucial to India's financial and taxation system. It acts as mandatory proof of identity for nearly all major financial activities, from filing taxes to managing assets. Because the system is built on the principle of a singular identity, holding more than one PAN—whether by accident or design—can result in a financial penalty under Section 272B of the Income Tax Act. Understanding the rules against multiple PANs is essential for compliance and safeguarding your financial integrity.
The Absolute Mandate: One PAN Per Person
The fundamental rule governing the PAN is explicitly laid out in the Income Tax Act, 1961. Section 139A of the Income Tax Act, 1961, categorically mandates that no person shall obtain, possess, or use more than one Permanent Account Number. Once a PAN card has been allotted to an individual or entity, they are strictly prohibited from applying for or obtaining a second PAN. This provision underpins the government’s entire tax administration framework, ensuring that all financial transactions are consolidated and tracked under a single, unique identity.
The system is built on the principle of a singular financial footprint. The Income Tax Department uses the PAN to link all tax payments, investment activities, and financial assets to a single taxpayer. The existence of a duplicate PAN card immediately compromises this system, creating confusion, misreporting, and opportunities for tax evasion, which is why the penalty for non-compliance is so strict.
Why Do People End Up with a Duplicate PAN Card?
While some people might hold multiple PANs intentionally, most cases result from genuine human error, confusion, or simply a lack of awareness. Recognizing these common scenarios is the first step toward prevention:
Re-application Due to Delay or Loss
When an individual applies for a new pan card and experiences a delay in its delivery, they often panic and re-apply, believing the first application was lost or rejected. Unbeknownst to them, the first application may still be processing, resulting in the allotment of two distinct PANs. Similarly, an individual who loses their original pan card might apply for a new one instead of simply requesting a reprint or correction of the existing PAN.
Changes in Personal Details
A prevalent cause, particularly among women, is applying for a new pan card after marriage to reflect a change in surname. The correct procedure is not to apply for a new PAN, but to file a ‘PAN Change Request’ application to update the details on the existing pan card. Re-application invariably leads to a duplicate PAN card issue.
Application Under Different Categories (Individual vs. Business)
To clarify, a sole proprietorship requires the proprietor’s personal PAN, but separate PANs are required for registered Companies, LLPs, and Partnerships. Incorrect applications for new PANs may lead to duplication or linking issues if not handled as per ITD rules.
Errors by Intermediaries or the Department
Though rare today, administrative errors or mistakes by application intermediaries (PAN Service Agencies) can sometimes lead to a person being inadvertently allotted a second PAN.
| Also Read: Online Application Process for Lost Cards |
Section 272B and the ₹10,000 Penalty
The legal teeth behind the single-PAN rule are contained in Section 272B of the Income Tax Act. This section prescribes the penalty for non-compliance with the provisions of Section 139A.
The Penalty: If a person is found to possess or use more than one pan card, the Assessing Officer (AO) of the Income Tax Department is empowered to impose a hefty penalty of ₹10,000.
This penalty is not merely a slap on the wrist; it is a serious financial deterrent. The ₹10,000 penalty applies for possessing multiple PANs, quoting an incorrect PAN, or quoting an inoperative PAN (such as PAN not linked with Aadhaar) during transactions where PAN is mandatory. If you were to use your duplicate PAN card for multiple transactions, the Income Tax Department could potentially interpret this as a violation for each instance, though the standard penalty for merely holding the duplicates is a flat ₹10,000 fine.
Beyond the fine, the discovery of a duplicate PAN card immediately raises a red flag for the tax authorities. It suggests an attempt to:
- Evade Tax Liability: By splitting income, investments, and capital gains across two different PANs, a taxpayer might try to keep their total income below the highest tax bracket, thereby evading legitimate tax.
- Manipulate Capital Gains: Using multiple PANs to hide transactions, such as the sale and purchase of property or shares, to avoid scrutiny on long-term capital gains.
- Complicate Investigations: A duplicate PAN card can make it difficult for the ITD to compile a comprehensive profile of the taxpayer's financial activities.
The consequences extend beyond the tax domain. Banks and financial institutions treat individuals with multiple PANs with extreme suspicion, as it is a strong indicator of potential financial fraud or illegal activities. This can make financial institutions more likely to deny loans or credit cards, since having multiple PANs is seen as a risk factor for fraud; this may, in turn, impact your ability to engage in high-value financial transactions.
How to Surrender Your Duplicate PAN Card
If you realize that you inadvertently hold a duplicate PAN card, the most prudent course of action is immediate and voluntary surrender. The Income Tax Department provides a clear mechanism for this, and by taking prompt action, you demonstrate good faith which may help in avoiding or reducing the ₹10,000 penalty imposed for holding multiple PAN cards.
The process of surrendering a redundant PAN can be done either online or offline:
Offline Surrender Procedure
- Determine the PAN to Retain: Select the original and correct PAN that you wish to keep and use.
- Fill the PAN Change Request Form (Form 49A/49AA): Obtain and fill out the "Request for New PAN Card Or/And Changes or Correction in PAN Data" form.
- Specify the Duplicate PAN: Crucially, mention the duplicate PAN card number(s) you wish to surrender in Item No. 11 of the form. Clearly state that these PANs are being surrendered for cancellation.
- Write a Surrender Letter: Draft a formal cover letter addressed to the Assessing Officer (AO) of your jurisdiction. This letter should clearly state your intention to surrender the duplicate PAN card due to inadvertent allotment, provide details of the PAN to be retained and the PAN(s) to be cancelled, along with your personal details.
- Submission: Submit the filled form, the cover letter, and a copy of the duplicate PAN card (the one you are surrendering) to the nearest NSDL or UTIITSL PAN Facilitation Centre.
- Obtain Acknowledgement: Always insist on receiving a stamped acknowledgment receipt. This document is vital as proof that you have initiated the surrender process, protecting you from future penalties.
Online Surrender Method
While the physical submission via Form 49A is the traditional and most recognized method for surrendering a pan card, you can initiate the process online by selecting the 'Changes or Correction in existing PAN data' option. During this online application, there will be a section (usually under Point 11) to specify the multiple PANs inadvertently allotted to you for surrender. After completing the form and payment, you must still print the acknowledgment and courier the supporting documents, including the copy of the duplicate PAN card, to the respective IT Service Unit address.
Verifying Your PAN Status
To proactively avoid the duplicate PAN card trap, taxpayers should regularly verify the status of their PAN. The Income Tax Department provides an online facility to check the validity of any PAN on the e-filing portal. This simple check ensures that your primary PAN is operative and helps you verify that your PAN details are correct, thereby reducing the risk of issues like duplicate PANs. With modern identity verification systems, especially the mandatory linking of PAN with Aadhaar, the chances of obtaining a new pan card by mistake are significantly reduced, but compliance remains the taxpayer's responsibility.
The Final Note
The regulation against holding a duplicate PAN card is strictly enforced and non-negotiable. Because possessing multiple PANs undermines the financial system's transparency and accountability, the government treats it as a serious breach of tax compliance. This is underscored by a minimum ₹10,000 penalty under Section 272B, which can extend higher depending on the severity of the violation. If you realize you hold more than one PAN, you must immediately initiate the surrender process.
Taking this prompt, corrective action is the best way to ensure your finances remain compliant, transparent, and free from the threat of legal scrutiny or penalties from the Income Tax Department. The 10-digit PAN must remain unique.
Frequently Asked Questions (FAQs)
Q1. Is it illegal to have two PAN cards?
Yes. Section 139A of the Income Tax Act, 1961, strictly prohibits a person from possessing or using more than one Permanent Account Number (PAN).
Q2. What is the penalty for holding a duplicate PAN card?
The penalty for holding a duplicate PAN card is a fine of ₹10,000, which can be imposed by the Assessing Officer (AO) under Section 272B of the Income Tax Act.
Q3. How can I surrender my extra PAN card?
You can surrender it online or offline by filling the 'Request for New PAN Card Or/And Changes or Correction in PAN Data' (Form 49A/49AA), mentioning the duplicate PAN card details, and submitting it via the PAN Service Centre or online portal. A surrender letter may be needed if submitting offline.
Q4. What are the most common reasons people get a duplicate PAN?
The most common reasons are reapplying for a pan card when the original is delayed or lost, and applying for a new pan after a change in surname (e.g., after marriage) instead of requesting a correction.
Q5. If I have a duplicate PAN, should I keep the older one or the newer one?
You should generally retain the older, original PAN and surrender the newer, duplicate PAN card. Always ensure the retained PAN is linked to all your bank accounts and financial records.
