Permanent Account Number (PAN) is a unique 10-digit alphanumeric identifier issued by the Income Tax Department of India. It is allotted to individuals, firms, companies, trusts, societies, Hindu Undivided Families (HUFs), and associations of persons to facilitate income tax compliance and financial transactions.
PAN helps in filing income tax returns, tracking financial transactions, and preventing tax evasion. The Income Tax Department can trace financial activities of PAN holders. However, under certain circumstances, PAN may need to be surrendered.
A PAN can be surrendered under the following situations:
• When a company is dissolved, its PAN must be surrendered to the jurisdictional Assessing Officer (AO).
• The surrender can only take place after completing all pending tax assessments and legal formalities.
• If a partnership firm or Limited Liability Partnership (LLP) ceases operations, its PAN should be surrendered.
• The surrender must be done through the jurisdictional AO after ensuring all tax obligations are met.
• In the event of an individual’s death, the legal heir can file the last income tax return on behalf of the deceased.
• The Income Tax Department acknowledges the individual’s death and processes the final return.
• PAN is not required to be surrendered formally but can be deactivated upon request.
• As per Section 139A of the Income Tax Act, 1961, an individual or entity is allowed to possess only one PAN.
• Holding multiple PANs is an offense and may attract a penalty of INR 10,000 under Section 272B of the Income Tax Act.
• A duplicate PAN must be surrendered online or by writing to the jurisdictional AO.
Step 1: Prepare an Application
• Draft an application addressed to the jurisdictional AO requesting PAN surrender.
• Include details such as company/firm name, PAN number, date of closure, and reasons for surrender.
Step 2: Attach Supporting Documents
• Company/Firm closure proof (Dissolution Certificate, Strike-Off Order, etc.).
• No dues certificate from the Income Tax Department.
• Original PAN card (if available).
Step 3: Submit to the Jurisdictional AO
• Submit the application and documents to the AO in person or via registered post.
• The AO will process the request after verifying tax records.
Step 1: Legal Heir Registration
• The legal heir must register on the Income Tax e-filing portal and link their PAN with the deceased’s PAN.
Step 2: File the Final Tax Return
• File the last return mentioning the deceased’s income up to the date of death.
• Attach the death certificate for official record.
Step 3: Request for PAN Deactivation
• Submit a request to the AO along with:
o Death certificate copy
o Legal heir proof (Will, Succession Certificate, etc.)
o PAN card of the deceased (if available)
Online Process (NSDL/UTIITSL Portal)
a. Visit the NSDL or UTIITSL PAN correction portal.
b. Select ‘Changes or Correction in PAN data.’
c. Enter details and mention the PAN to be retained.
d. In the ‘Duplicate PAN’ column, provide the PAN to be surrendered.
e. Submit the form and pay the required processing fee.
f. Receive acknowledgment for PAN surrender.
Offline Process (AO Submission)
a. Draft a letter to the AO mentioning the PAN to be surrendered.
b. Attach copies of both PAN cards.
c. Submit the request to the AO for deactivation.
• Pending Litigations: If any tax dispute is pending, PAN surrender will only be processed after resolution.
• Multiple PANs: It is mandatory to retain only one PAN; failure to surrender duplicates may lead to penalties.
• Tax Filing Compliance: Before surrendering PAN, ensure all tax returns and liabilities are cleared.
Case 1: PAN Surrender by a Defunct Company
XYZ Pvt. Ltd. was voluntarily liquidated. After filing the final tax returns and obtaining clearance from the Income Tax Department, the company’s authorized signatory applied for PAN surrender. The AO processed the request, and PAN was successfully deactivated.
Case 2: Individual with Multiple PANs
Mr. A accidentally obtained two PANs. To avoid a penalty, he applied for PAN surrender via the NSDL portal. He received an acknowledgment, and the duplicate PAN was deactivated within 30 days.
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A PAN is a unique 10-digit alphanumeric identifier issued by the Income Tax Department of India to all taxpayers. It serves as a unique identification number for tracking financial transactions and is mandatory for various financial activities.
A PAN is required for various purposes, including: Filing income tax returns Making financial transactions (e.g., opening bank accounts, investing in mutual funds) Buying or selling property Applying for loans Many other financial activities.
No, a person is only allowed to have one PAN. Holding multiple PANs is illegal and can lead to penalties.
A PAN can be surrendered in specific circumstances, such as: Duplicate PAN: If a person has been inadvertently allotted two PANs. Death of the PAN holder: In this case, the legal heirs can surrender the PAN. Change of status: For example, when an individual becomes a non-resident and no longer requires a PAN in India. Company/entity closure: When a company or other entity ceases operations.
While not always legally mandated, it is highly advisable to surrender a PAN in these situations to avoid potential misuse or complications in the future. It’s a responsible practice.
The process involves informing the Income Tax Department about the reason for surrender and submitting an application along with supporting documents.
The process generally involves: Identifying the correct reason for surrender. Writing an application to the jurisdictional Assessing Officer (AO). Including supporting documents (e.g., copy of duplicate PAN card, death certificate, proof of change of status, company closure documents). Submitting the application to the AO.
There isn’t a specific form solely for PAN surrender. The application is typically a written letter addressed to the AO, clearly stating the reason for surrender. Sometimes, the AO might ask you to fill out a specific form available at their office.
The required documents depend on the reason for surrender:
Duplicate PAN: Copy of both PAN cards.
Death of PAN holder: Death certificate, legal heir certificate, and copy of the deceased’s PAN card.
Change of status: Documents supporting the change of status (e.g., passport, visa).
Company/entity closure: Documents related to the closure of the company/entity.
The application should be submitted to the jurisdictional Assessing Officer (AO). You can find your AO’s details on the Income Tax Department’s website.
The Income Tax Department will process the application and, if approved, deactivate the surrendered PAN. You may receive an acknowledgement.
You may need to inform banks, financial institutions, and other relevant parties about the PAN surrender, especially if it was used for any accounts or investments.
Holding multiple PANs can lead to penalties and scrutiny from the Income Tax Department.
You will need to update your bank accounts and investments with your active PAN (if you have another) or inform the respective institutions if you are no longer required to have a PAN.
Reactivation is generally not straightforward and may require demonstrating valid reasons to the Income Tax Department.
You can find your AO’s details on the Income Tax Department’s website.
You can apply for a new PAN card online through the NSDL or UTIITSL websites.
The fee is prescribed by the Income Tax Department.
It usually takes a few weeks.
You can apply for a duplicate PAN card.
You can update your details online through the NSDL or UTIITSL websites.
Penalties can be significant.
Currently, the surrender process typically involves a written application to the AO.
Your income tax records are linked to your PAN, so they will remain with the Income Tax Department even after surrender.
The Income Tax Department’s website is the official source for notifications and circulars.
