Misuse of PAN No. - BEWARE!

Indian Railways:

Abuse of PAN No. Passport Details - Do not quote for Tatkal bookings.

Do not quote PAN for Tatkal bookings. Indian Railways display PAN as identity proof for Tatkal bookings.

The Railways have collect PAN for Tatkal bookings and display the PAN+ name, sex and age of passengers on reservation charts pasted on railway compartments.

This is a boon for benami transactions. It is mandatory for traders like jewelers to collect tax (TCS) from customers on purchase of jewellery worth Rs.5 lakh & bullion worth Rs.2 lakh. While complying with TCS rules for collection, payment, and uploading of TCS information (e-filing of TDS returns) jewelers have to furnish PAN of customers. Customers it is not convenient to provide PAN.

To accommodate high net worth customers, traders have a easy source of benami PAN numbers, name, sex and age from reserved railway compartments. A traveler recently noticed a chap copying PAN particulars along with name, age and sex pasted on reserved compartments, and when confronted with the help of railway police, he admitted that he gets Rs.10/- per PAN particulars from jewelers. These persons are copying PAN information of senior citizens, women etc. from sleeper class with the intention that passengers in sleeper class are not serious taxpayers and generally salaried class.

This wrong usage of a PAN number is known to the regular taxpayers, who regularly check their tax credit on form 26 AS provided by the Income Tax department on their website. This form 26-AS is updated only on filing of e-TDS returns by the traders. There is almost 6-12 months time delay for the PAN holder to know that a transaction of above nature has taken place on his name and that too only if he goes through form 26 AS. On noticing the tax credit of above nature while reconciling form 26 AS for tax credits for filing the return during subsequent financial year i.e. July / September, the taxpayer has an option to exclude the same and go ahead in filing the return. In that case, the department will first initiate action from the taxpayer's side asking him to explain the sources of money for the above transaction done in his name and to prove that he has not carried on the above transaction. The onus lies on the genuine taxpayer for the fault committed by the traders. This dispute may even take more than 2 years for settlements.

In conclusion, the only way to protect you from these fraudulent transactions is to avoid quoting PAN details for identity proof.

Sent by Arun Shroff