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Crackdown on duplicate PAN cards

Sections of I-T laws being revisited, fine or jail for those with multiple cards, report Monica Gupta & Sangeeta Singh.

india Updated: Jan 22, 2007 01:31 IST

Tax-payers evading tax by using multiple Permanent Account Numbers (PANs) must by the end of February own up their errors. After that, the government plans to get tough: some offenders will be fined; others could be jailed. This year's Budget will list out the exact penal provisions.

The Income Tax Department has so far issued 50 million PAN cards. In a bid to curb tax evasion, several high-value transactions now require individuals to quote their PAN number and, in some cases, provide a copy of the card. The department says that it believes 1.3 million of these cards are duplicates, not substituting existing ones but used separately by some individuals who already have a PAN card. New Delhi, with 600,000 duplicate cards, accounts for almost half.

Individuals with multiple PAN cards, can evade tax by using one card while filing returns, and another while investing in financial instruments or making high-value transactions. Officials at the Finance Ministry say that the original plan, which has not entirely been abandoned, was to prosecute the chartered accountants filing returns on behalf of these individuals.

"If it is being done with the purpose of cheating, all those involved—be it the PAN card holder or his/her chartered accountant—should be penalised. However, I feel that chartered accountants may sometimes not be party to irregularities and do so only inadvertently. So there should be scope for flexibility,” says Manoharan TN, president of the Institute of Chartered Accountants of India.

Specific sections of income tax laws are being revisited, say officials at the Finance Ministry, adding that these could be amended to increase penalties and maximum jail terms.

The income tax department is set to launch a campaign highlighting the issue of duplicate PAN cards, and the penalties involved, on February 13. Towards the end of 2006, it had issued letters to all owners of duplicate PAN cards, asking them to use only one card. Now, it has decided that the time for polite letters is over. Filing their tax returns for 2006-07could well be a nightmare, and one they brought on themselves, for people who hold more than one PAN card.

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First Published: Jan 22, 2007 01:22 IST