Table of Contents

PAN Surrender in India: When & How to Surrender Your PAN Card

1. Introduction to PAN

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.

2. Circumstances for PAN Surrender

A PAN can be surrendered under the following situations:

2.1 Winding Up of a Company

• 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.

2.2 Closure of Firm/LLP

• 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.

2.3 Death of an Individual

• 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.

2.4 Possession of Multiple PANs

• 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.

3. Procedure to Surrender PAN

3.1 Surrendering PAN of a Closed Company or Firm

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.

3.2 Surrendering PAN of a Deceased Individual

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)

3.3 Surrendering a Duplicate PAN

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.

4. Important Considerations

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.

5. Case Study

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.

With ever-evolving tax laws, compliance remains crucial. ReturnFilings.Com ensures seamless PAN surrender services, handling legal and procedural requirements efficiently while allowing you to focus on your business. For professional assistance, reach out to us on email: info@returnfilings.com or on whatsapp: https://wa.me/919910123091 to ensure all statutory obligations are met on time.

frequently asked questions (faq's) related to Surrender of PAN

Q What is a PAN (Permanent Account Number)?+

Q Why is a PAN required?+

Q Can a person have more than one PAN?+

Q When can a PAN be surrendered?+

Q Is it mandatory to surrender a PAN in all these situations?+

Q How do I surrender a PAN?+

Q What is the process for surrendering a PAN?+

Q What form is used for surrendering a PAN?+

Q What documents are required for surrendering a PAN?+

Q Where do I submit the PAN surrender application?+

Q What happens after the PAN is surrendered?+

Q Do I need to inform anyone else about the PAN surrender?+

Q What happens if I don't surrender a duplicate PAN?+

Q What happens if I surrender a PAN that is linked to my bank accounts or investments?+

Q Can a surrendered PAN be reactivated?+

Q How do I find my AO (Assessing Officer)?+

Q What is the process for applying for a new PAN card?+

Q What is the fee for applying for a new PAN card?+

Q How long does it take to get a new PAN card?+

Q What should I do if I lose my PAN card?+

Q How can I update my details on my PAN card?+

Q What are the penalties for holding multiple PAN cards?+

Q Can I surrender a PAN online?+

Q What happens to my income tax records after I surrender my PAN?+

Q Where can I find the latest Income Tax Department notifications and circulars related to PAN?+