A report says number of PAN cards far exceeds the number of tax payers. This raises concern that tax dodgers may be using multiple cards to hide income. The Income Tax ( I- T) department has issued close to 10 crore permanent account number ( PAN) cards but the number of taxpayers in the country is only one- third of this number, giving rise to serious concern that many tax dodgers are using two or more cards to conceal income.

According to the latest report of the Comptroller and Auditor General of India ( CAG), while 958 lakh PAN cards were issued till the end of March 2010 only 340.9 lakh tax returns were filed during 2009- 10.

A senior official told M AIL T ODAY that instances of assessees with two or more PAN cards have been detected which show that multiple cards are being used to hide income.

The PAN card allotted to a taxpayer is the unique identification number that helps track individual tax compliance. It has to be furnished for all major transactions and opening bank accounts so that the IT authorities can trace the money trail of assessees. ” However, this prime purpose for which a PAN card is issued gets defeated if taxpayers get hold of more than one card,” a senior official pointed out.

An I- T official confirmed that the department has now initiated the exercise to weed out duplicate PAN cards but it is will take a long time given the huge database that has to be sifted through.

According to sources, the I- T department is looking for similar names, residential addresses and identical dates of birth to detect such multiple cardholders and check tax evasion.

PAN cards are issued by the I- T department, but the front- end of the process has been outsourced to UTI Technology Services Ltd and the National Securities Depository Ltd since July 2003.

The CAG report points out that the Central Board of Direct Taxes ( CBDT) needs to identify the reasons for the huge gap between the number of PAN cards and the number of taxpayers who actually file returns. ” The gap might be due to the issuance of duplicate PAN cards and death of some PAN card holders,” it adds.

According to sources, the death of PAN card holders can account for only a small portion of this gap. ” Some of the PAN card holders use them for establishing their identity and may genuinely not be required to pay tax. But there is a huge number of individuals who are misusing multiple PANs to dodge taxes,” a senior official said. It is this category that the CAG wants the I- T department to crack down on so that tax evasion is checked and revenue collection gets a boost, a senior official said.

The report points out that the growth in direct tax revenue has not been keeping pace with the growth in gross domestic product ( GDP). The logic is that a higher GDP growth rate leads to higher incomes, which should translate into higher taxes.

However, this is not happening. The report said, for every unit of growth in the GDP, direct taxes grew from 1.7 per cent in 2005- 06 to 2.6 per cent in 2007- 08. However, this figure came down to 0.5 per cent and 0.8 per cent in 2008- 09 and 2009- 10, respectively. This sharp decline in tax buoyancy is a matter of concern, the report added.

Source- Mail Today, Yahoo Finance

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  1. debasis says:

    PAN card and no. of tax payers are 2 different things. A person having PAN need not file ITR if his Gross income is well below the statutory limit. The increase in PAN card numbers are because of all the finanicial transactions for PAN hence there is rise in PAN then the actual ITR filed

  2. Jimmy says:

    i learned the other day that a thirteen day old baby got her PAN card. do u men to say that she has to file her ITR, ridiculous indeed. many people have PAN cards as ID proofs rather then to file ITRs. otherwise let the IT officials take an undertaking from all those applying for PAN to compulsorily file their returns every year irrespective of whether they have income or not.have a rule and people will follow. don’t expect all good people in India (or anywhere else in the world for that matter)

  3. Rangaprasad says:

    This is because of the compulsion by the bankers to the customers to own a PAN CARD for banking operations and the credit card agents needs the IT return (formality)to get the credit card to the customers.

    Customers simply forget the importance of the PAN Card after the purpose of availing PAN CARD is over.

  4. Ashok Aggarwal says:

    PAN card holder need not to file tax returns so in tranpost industry tranporters are holding cards to avoid TDS but they are not obliged to file their tax returns resulting in such gap which is obvious.Similarly PAN card is must for bank account opening but the holder need not file tax return. Like western countries all PAN card holders must file return even though the total income falls below the chargeable income to tax. for this matching program.

  5. Ramesh Kumar Thakur says:

    Sir “rising serious concern that many tax dodgers are using two or more cards to conceal income” by the Department, may be some how correct, but SEVERAL factors are also involved here that the dispatching process and concentration about the delivery, is not as serious as the PAN card is an important and essential documents. The Direction must be issued to all the agency concern regarding the PAN card deliver, that no any PAN card should be return without waiting at least 15 days regular inquiry about the concerning persons of the PAN Card.if after this the addressee not find it should be directly return to the department with the noting of fifteen days and thereafter a complain should be lodge against with the not known addressee.

  6. NISBAN says:

    Hilarious, but a stark truth. Because, PAN cards/Nos. must be “paid for” and one can obtain any number of PANs as desired–for fixed sum. Another reason is, the poor people keep changing addresses very often due to landlords’ terror, after applying for PAN. These are returned, without any attempt to trace the people and hand over to them. Once they are returned, these are then sold for very hefty sums. If the Govt. had the system of asking the nominated banks of the applicants to hand over these PAN cards, much of the fraud could be tackled. But, wich bureaucrat/petty govt. employee will care?

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October 2021