25-Feb-2016 written by : FSI-Team
In some cases, more isn’t always merrier, and when it comes to Permanent Account Number (PAN) cards that certainly holds true. This can not only lead to being construed as financial fraud but also has potential to getting all your credit access blocked despite having good CIBIL score.
Over the past few years the Income Tax Department has detected and destroyed over 12 lakh PAN cards that have been issued to the same individuals multiple times. Reasons for this vary, but primary among them is the reason that cards were reissued to those who had lost their cards and had not applied for reissuance against the old PAN number itself, but instead had made fresh applications. This was especially true when PAN cards were issued in the absence of a centralised computer system and hence duplication was not easy to detect.
According to the governmental guidelines set in store, having more than one PAN card issued in your name is against the law and is a punishable offence. The Government requires that anyone holding multiple PAN cards needs to surrender the same failing which they are likely to face a legal notice as well as be required to pay up a penalty of Rs. 10,000 under Section 272B of the Income Tax Act, 1961.
Any duplicate PAN card(s) can be surrendered either online or manually, depending upon your convenience. Once you submit all the details, the Income Tax department will issue an acknowledgement of having received the same and will proceed with cancelling the additional PAN card. Do keep in mind that for any communication in this regard, always maintain a copy of the acknowledgement letter issued to you by the Income Tax department.
When you’re looking for the right credit solution – be it a loan or a credit card – here’s when your PAN number comes in handy. One of the documents taken into consideration includes the PAN card, and any discrepancy here can be detrimental to your application.
As a rule, banks and financial institutions decline loan applications if an applicant has multiple PAN cards. They are classified as an intentional fraud, and the applicant’s ability as well as the intention to repay debt is strongly questioned.
Further, banks maintain an internal suspected fraud database. While this database is not shared outside of the bank that maintains it, once you on this database, your chances of getting a loan are practically nil. Even for someone with a poor CIBIL score getting a fresh line of credit (while difficult) may just be possible, but once you feature on this list you are blacklisted from that bank for good. Currently this database is not shared inter-bank, but if that comes into effect, then the blacklisting will be across all banks and not just the one that initially maintained this information.
To cite an example, Borrower A has applied for a loan with a bank and provided his PAN card for the same. The loan application is approved, and over a period of time, after two good loan cycles, i.e. with no delayed or skipped payments, Borrower A again approaches the bank for another loan. This time however the PAN card provided by him has another number. This was applied for on account of losing the first PAN card and instead of requesting for a duplicate card (with the same number) to be issued, Borrower A just got himself another card. This was noticed at the time of the second loan application, and the bank declined the request. Not even with a good repayment track record was the bank willing to override the norm of having only one PAN card, irrespective of the reason why the second was held.
With computerised systems and database tracking, getting a duplicate PAN card reissued in case of loss/ theft is not a problematic process. Hence, to save yourself a problem at a future date with regards to your finances, it is wise to sort out your PAN card once and for all.