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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