In a significant move to enforce compliance with PAN-Aadhaar linking norms, the Income Tax Department has intensified its crackdown on the use of inoperative Permanent Account Numbers (PANs), warning of severe financial penalties for violations. Individuals found using inoperative PANs for financial transactions could now face a penalty of ₹10,000 per instance, under Section 272B of the Income Tax Act.
Government’s Tough Stand on Non-Compliance
The stringent enforcement drive is aimed at bolstering tax transparency and curbing evasion. According to senior officials, quoting or using an inoperative PAN—particularly in high-value financial dealings—will attract strict penal action. Transactions under scrutiny include:
- Opening or managing bank accounts
- Making investments in shares or mutual funds
- Purchasing immovable property
- Applying for loans
- Filing income tax returns
Each of these activities, if conducted using a non-functional PAN, could invite a separate penalty of ₹10,000.
PAN Becomes Inoperative Without Aadhaar Linking
The tax department had earlier mandated linking of PAN with Aadhaar to maintain validity. Individuals who missed the deadline now face the consequence of having their PAN declared inoperative. Such PANs are invalid for most tax and financial purposes.
Moreover, officials noted a renewed focus on identifying individuals possessing multiple or fraudulent PAN cards. The use of duplicate or unlinked PANs is illegal and may lead to legal action alongside monetary penalties.
Tech-Driven Surveillance for Better Enforcement
To strengthen monitoring, the department has begun deploying artificial intelligence and data analytics to identify misuse of PANs. These tools are capable of detecting:
- Invalid or erroneous ITR filings
- Fraudulent refund claims
- High-value financial activity carried out using inactive PANs
“AI-backed systems are automatically flagging discrepancies and blocking transactions tied to non-compliant PANs. We’re now proactively identifying and acting against such misuse,” said an official.
What Taxpayers Must Do
Experts are advising immediate action for those who haven’t yet linked their PAN with Aadhaar. The linking can be done online via the Income Tax Department’s e-filing portal. Consequences of inaction include:
- Suspension of PAN
- Freezing of bank or demat accounts
- Rejection of income tax refund claims
- Inability to file tax returns
A Warning to All Taxpayers
This latest move is part of the government’s broader effort to tighten identity verification and eliminate tax fraud. With no tolerance for discrepancies or outdated documentation, taxpayers are urged to ensure their PANs are both active and properly linked to Aadhaar.
The crackdown marks a clear shift toward digital surveillance and real-time enforcement—leaving little room for error or non-compliance.
Read More: GST on Income from Google AdSense On YouTube & Blogging
