Having Multiple PAN Cards Can Lead to Loan Rejection. Here’s How
Your PAN card is a critical document. Every individual, especially over the age of 18 years should have one. Section 139A of the Income Tax Act 1961 along with Rule 114 in the Income Tax Rules makes it mandatory for every individual over the age of 18 years and having a valid source of income to have a PAN card.
What is the purpose of a PAN Card?
The PAN is a unique 10-digit alpha-numerical identity allotted to applicants by the NSDL (National Securities Depository Limited). Every individual and business has a distinct PAN. There is no duplication under any circumstances. The PAN card enables the Government to access your financial data for tax and other related purposes. The PAN is a proof of identity as well. Banks use the PAN to verify your credit history and assess your credit score. To apply for a Personal Loan or any other loan, you have to submit your PAN details to the bank or NBFC (Non-Banking Financial Company).
Do you Have Multiple PAN Cards?
It is crucial to ensure that you do not have more than one PAN in your name. It is also an offence to have multiple PAN cards. You are liable to face the consequences of having more than one PAN.
Let us look at the immediate repercussions of having multiple PAN cards.
Rejection of Loan Applications:
Banking works on the vital aspects of trust. Having multiple PAN cards is not a sign of trustworthiness. Banks blacklist individuals having multiple PAN cards. They not only reject their loan applications but also report their details to the Income Tax authorities. It can invite investigation from the Income Tax Department.
Ineligible to Obtain Secured and Unsecured Loans:
Individuals and businesses having multiple PAN cards become ineligible to obtain both secured and unsecured loans. It is a fraudulent offence with the banks having the right to report the details to the concerned authorities.
Section 27B of the Income Tax Act 1961 stipulates a minimum penalty of 10,000 on people having more than one PAN card. The amount can go higher in cases involving income tax evasions or frauds.
Possessing dual PAN cards can lead to prosecution under the IT Act. It acquires greater significance in the event of tax evasion, money laundering, or tax frauds. You risk attracting severe punishment under the Indian Tax and Money Laundering Laws.
How Do People End Up Having Multiple PAN Cards?
Most of the time, people end up with multiple PAN cards unintentionally. It can happen if you submit multiple PAN applications to the Income Tax Department. It can happen that you might not have received your PAN allotment or card from the department. Under such circumstances, applying again can cause the issuance of multiple PAN cards. However, there are many cases of people obtaining multiple PAN cards intentionally to avoid paying tax. You also have people applying for numerous PAN cards because of existing adverse credit history. The intention in both the cases is a fraudulent one liable for prosecution.
How Do You Resolve the Issue of Multiple PAN Cards?
The moment you discover you have multiple PAN cards, you should report to the Income Tax authorities to cancel the duplicate numbers and delete them from the system. You can do it online as well as offline. The online process is a straightforward one. Visit the official website of NSDL and choose the “Change” or “Correct” PAN details. You can find this option on the Services Tab. Follow the simplified procedure, and submit your application online. In case you adopt the offline route, you have to download the form from the NSDL, fill the necessary data, and submit the same to your nearest UTI or NSDL centre. The process of updating the data can take about 8 to 10 days. Reporting to the tax authorities can save you from a lot of problems. You can avoid unnecessary investigation by the tax authorities. It is better if you report the error rather than your bank doing so or the IT department detecting the same.
Let us sum up the consequences of having multiple PAN cards:
- Rejection of your loan applications
- Ineligible to apply for all kinds of loans
- Penalties imposed on you by the IT authorities
- Prosecution from the regulatory authorities
Take up the matter with the concerned authorities if you have additional PAN cards. Having multiple PAN cards can make you ineligible to Apply for the Low-Interest Rate Personal Loans.
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