Permanent account number or PAN (10-digit alphanumeric) allotted by the income tax department under the overall supervision of the Central Board of Direct Taxes acts as an identity proof for all taxpayers and has to be mandatorily quoted in all financial transactions.
How to Cancel PAN Card
A PAN card can be cancelled by either of the two methods as listed below:
Method of Cancellation of a PAN Card Online
- An assessee should log on to the official website of the income tax department at http://incometax.sparshindia.com/pan/newPAN.asp and fill in the required details after reading the instructions provided for completing the online form.
- Alternatively, an assessee can fill out the ‘PAN Change Request’ application form. The PAN currently in use has to be mentioned on the top of the form. The additional PANs allotted should be listed in item no. 11 while the PAN card which has to be cancelled should be submitted along with the form.
Method of Cancellation of a PAN Card Offline
- An assessee should fill out form 49A for any making any corrections in his or her the PAN card. Form no.49A should be submitted at any NSDL TIN facilitation center
- An assessee can also write a letter to the assessing officer of the concerned jurisdiction and list out all pertinent details as listed below:
- Address of the assessee
- Name of the assessee
- Details of additional PAN card which has to be surrendered
- Specific details of the PAN card which has to be retained
- It is important to note that the assessee needs to have an acknowledgement copy of the letter. The acknowledge letter from the income tax department per se acts as proof that the additional PAN has been cancelled. In other words, the assessee does not have to contact the income tax department again for confirmation on cancellation of his duplicate or additional PAN.
Reasons for cancellation or surrender of a PAN card
An assessee with more than one PAN card has to surrender his or her additional PAN as holding more an additional PAN card will attract a penalty of Rs.10,000.
An assessee may choose to cancel a PAN card for the following reasons:
- Multiple PANs issued inadvertently by the income tax department
- In many cases, multiple PAN cards can be allotted to one assessee for the following reasons:
- An assessee can apply multiple times for a PAN card. Consequently, multiple PANs are issued against his name by the income tax department
- In some cases, the NSDL or the income tax department can mistakenly allot multiple PAN cards to one assessee
- PAN which is currently in use has to be cancelled owing to some errors in it
PAN deactivation by Income Tax Department
The Income Tax Department is conducting a drive to deactivate PAN from income tax assessees who have been given multiple PAN cards. Ideally, an individual is supposed to have only 1 PAN. Several people have many PAN cards either with or without their knowledge.
This new mission of the IT Department is slowly having an impact on the people who have multiple PAN cards. They are unable to access their cards to file their IT returns. This is because the PAN that is being used by them to file returns may have been deactivated most likely. When the PAN is cancelled, the taxpayer's income tax e-filing login will also get blocked. This causes big trouble to the taxpayer as he or she will not be able to file IT returns on the e-filing platform of the Income Tax Department. The taxpayer will also not be able to check intimations or notifications or reply to communications made by the Income Tax Department through the website.
Steps to take when your PAN gets deactivated
When the PAN that you use for filing your tax returns gets deactivated, you may go through many hassles. You can take the necessary steps as soon as possible in order to rectify this issue:
- You will first have to draft and send a letter to your jurisdictional AO in the Income Tax Department requesting them to activate your PAN.
- You will have to attach certain documents mandatorily for activating your PAN. The documents include a copy of PAN on which you usually file your Income Tax Returns, Indemnity Bond in favour of the Income Tax Department, and a copy of Income Tax Returns filed for the most recent three years on the PAN that has been deactivated.
You need to note that it will take a minimum of 10 to 15 days for the department to reactivate your PAN once your request letter is received by them.
What you should do when you receive an online notification from the Income Tax Department
At times, you may get a notification or an intimation from the Income Tax Department regarding some update and you may be required to respond online. If your PAN has been deactivated, your e-filing login credentials will also be blocked and hence, you will be unable to give the response. In such cases, you will need to get in touch with your Jurisdictional AO to activate your PAN as soon as possible. Once your PAN is activated, you will need to ensure that you give your online response.