What Is the Risk of PAN Misuse in India?

PAN (Permanent Account Number) is a critical identity and tax document used for financial transactions in India. If it falls into the wrong hands or is misused, it can lead to legal, financial, and reputational consequences. Therefore, protecting your PAN from unauthorized use is extremely important.

• Financial Fraud and Identity Theft

• Fraudsters may use your PAN to open fake bank accounts or make unauthorized transactions.

• It can be misused to obtain loans or credit cards, leaving you with liability and poor credit score.

• PAN misuse can link you to illegal purchases or financial dealings without your knowledge.

• It may be used to impersonate you in investment schemes or shell companies.

• Tax Filing and TDS Mismatch Issues

• Your PAN can be used to file fake tax returns, claim refunds, or hide black money.

• TDS deducted on income you didn’t earn may show up in your Form 26AS or AIS.

• It can result in scrutiny notices, audit queries, or demand letters from the Income Tax Department.

• You may have to spend time and money resolving discrepancies and proving your innocence.

• Legal and Compliance Consequences

• Misuse of PAN in illegal business activities can implicate you in fraud or tax evasion cases.

• You may receive summons or legal notices even if you weren’t involved.

• PAN linked to bogus transactions may affect your professional or social standing.

• It may create complications during visa application, property purchase, or tax filing.

• Risks in Sharing PAN Carelessly

• Giving PAN photocopies to unknown agents or insecure websites increases risk of misuse.

• Submitting PAN without watermark or purpose statement allows duplication and resale.

• PAN misuse often happens through shared rent agreements, KYC forms, or job applications.

• Fraudsters use PAN data from public or leaked databases for illicit purposes.

• How to Prevent and Respond to PAN Misuse

• Always mark photocopies with date and purpose before submitting anywhere.

• Regularly check your Form 26AS, AIS, and credit report for unknown entries.

• Report suspected misuse to the Income Tax Department and Cyber Crime Cell immediately.

• Consider filing a police complaint and grievance on the Income Tax portal or NSDL website.