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”?
- 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.
- 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.
- 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?
| Scenario | Legal Provision | Consequence |
|---|---|---|
| Opening a bank account, investing, buying property, applying for a loan, or even filing your income-tax return with an in-operative PAN | Section 272B, Income-tax Act, 1961 | Fine 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)
- Visit the Income-tax e-Filing portal (https://eportal.incometax.gov.in).
- Under Quick Links or Instant e-Services, click “Verify Your PAN”.
- 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.
- Submit OTP received via SMS.
- The screen will instantly show whether your PAN is Active, In-operative or De-activated.
If Your PAN Shows “In-operative”, Do This Immediately
| Step | Action | Where / How |
|---|---|---|
| 1 | Link PAN with Aadhaar (if not already) | Same portal → Link Aadhaar → Pay late-linking fee (currently ₹1,000) |
| 2 | Re-verify the link | Use “Check Aadhaar–PAN Link Status” |
| 3 | Wait for re-activation | Status usually updates within 30 days (often sooner) |
| 4 | Got two PANs? | Surrender the duplicate online at NSDL or UTIITSL, or file “Request for surrender” at your local AO |
| 5 | Keep proof | Save 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.