Pan India

Government Cracks Down on Inactive PAN Cards With ₹10,000 Penalty

The Income-tax Department has begun levying penalties of up to ₹10,000 on anyone who continues to quote or use an in-operative Permanent Account Number (PAN). Many holders are unaware that their card has lost its validity and are still using it for routine banking, investments and other big-ticket financial transactions.


How Does a PAN Become “Inactive”?

  1. Not Linked to Aadhaar
    • Under current rules, every resident PAN must be linked to Aadhaar.
    • Missing the deadline (the last nationwide cut-off was 31 May 2024) automatically renders the PAN in-operative.
  2. Duplicate or Multiple PANs
    • Holding more than one PAN, even by mistake, violates Section 139A(7) of the Income-tax Act.
    • The department may deactivate one or both numbers until the duplicate is surrendered.
  3. Non-Compliance Notices
    • Failure to respond to repeated notices about discrepancies (KYC, name mismatch, etc.) can also trigger suspension.

What Happens If You Use an In-operative PAN?

ScenarioLegal ProvisionConsequence
Opening a bank account, investing, buying property, applying for a loan, or even filing your income-tax return with an in-operative PANSection 272B, Income-tax Act, 1961Fine up to ₹10,000 per trans­action and possible rejection of the financial activity

Important: A single mis-use can invite the penalty; repeated use can multiply it.


How to Check Your PAN Status (100 % Online)

  1. Visit the Income-tax e-Filing portal (https://eportal.incometax.gov.in).
  2. Under Quick Links or Instant e-Services, click “Verify Your PAN”.
  3. Enter
    • Your 10-digit PAN,
    • Full name (as printed on the card),
    • Date of birth, and
    • The mobile number that is already linked to both PAN and Aadhaar.
  4. Submit OTP received via SMS.
  5. The screen will instantly show whether your PAN is Active, In-operative or De-activated.

If Your PAN Shows “In-operative”, Do This Immediately

StepActionWhere / How
1Link PAN with Aadhaar (if not already)Same portal → Link Aadhaar → Pay late-linking fee (currently ₹1,000)
2Re-verify the linkUse “Check Aadhaar–PAN Link Status”
3Wait for re-activationStatus usually updates within 30 days (often sooner)
4Got two PANs?Surrender the duplicate online at NSDL or UTIITSL, or file “Request for surrender” at your local AO
5Keep proofSave acknowledgement receipts in case a penalty notice arrives while the update is in progress

FAQs

  • Will the fine be charged automatically?
    No. A penalty under Section 272B is imposed only after the department issues a show-cause notice and you fail to provide a satisfactory explanation.
  • Can I still e-file my return with an in-operative PAN?
    Technically yes, but the return will be treated as defective until the PAN is restored, delaying refunds and possibly inviting additional notices.
  • What if I’m an NRI?
    NRIs must also link PAN with Aadhaar unless they fall under officially exempt categories. Check the latest CBDT circulars for updates.

A five-minute online check can save you a ₹10,000 penalty, plus the hassle of stalled bank transactions, rejected property deals and delayed tax refunds. Verify your PAN today, link it to Aadhaar if required, and surrender any duplicates. A small bit of compliance now can prevent a large headache later.

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