Finance Ministry plans penalty for PAN misuse

New Delhi, June 1: As part of tightening up of the tax regime, the Finance Ministry plans to make more stringent provisions relating to misuse of Permanent Account Number (PAN) cards and have an expiry date for it.

Highly placed sources in the Ministry told UNI that those who wrongly use the PAN card while filing their income tax returns and undertaking financial transactions will now have to face stringent action from tax sleuths.

An expert panel, constituted to simplify the 'Saral Form' for Income Tax returns, has recommened that there should be an expiry date on each PAN card on the lines of a passport, credit card or driving licence. After the expiry date, the PAN card will have to be renewed, the sources said.

This will enable the authorities to track down those PAN card holders who give wrong names and addresses. Under the present system, a PAN card does not have any expiry date which leaves the possibility of its misuse for all times.

The Central Information Branch (CIB) of the Central Board of Direct Taxes (CBDT) is to be given the power to impose a penalty on those who misuse PAN cards.

The ten-digit PAN card's registration is mandatory in more than a dozen types of financial transactions. It has, however, been observed that over a period of time some errant tax payers, after furnishing wrong names and addresses, indulge in financial irregularities.

The government has, from time to time, issued directives regarding PAN card usage, plugging the loopholes in the system. The PAN card is an effective instrument in the hands of the government to check the rampant tax evasion.

UNI