The government has asked all holders of duplicate permanent account number to surrender the extra cards or face legal notice and pay a penalty of Rs 10,000. But it has not set any deadline for this. Currently, there are approximately 13 lakh duplicate PAN card holders in the country.
To date, a total of 4.7 crore PAN cards have been allotted and over 5 lakh applications are being received every month for new cards. The government has, however, denied allegations of fraud or any wrongdoing in the card allotment process.
Earlier, finance minister P Chidambaram had said that duplicate PAN cards would be wiped out by December 31. The duplicate cards were issued in 1990s when there was no centralised system of computers to cross-cheque the issueing of cards. According to central board of direct taxes (CBDT) spokesperson A K Sinha, the department is exploring the possibilities of issuing biometric PAN cards, which will detect physical identities of a card holder.
Most duplicate PAN card holders have them as the authorities, and in the process of expediting the issuance of cards, would have erroneously issued two similar cards with the same PAN number to the same person. But the governments real concern is about those fake card holders who have someone elses PAN number.
Sinha said such cases amounted to fraudulent activity. Besides, the law also considers intentional possession of more than one PAN card as an offence. He said between April and July, about 1.26 crore people filed tax returns and, of this, 4 lakh filed them through the newly introduced postal system.
Bad news for REC, NHAI bond investors
For those planning to get capital gains tax benefits by investing in REC and NHAI bonds, there is bad news. Addressing a press conference, CBDT spokesperson A K Sinha said the government was not planning to increase the limit of these bonds, though they had been oversubscribed. This is because the notification regarding this came late and, according to the law, one has to invest in these bonds within six months of earning the capital gains.
Under Section 54C of the Income Tax Act, those investing in these bonds are eligible for tax benefits.
Double taxation avoidance treaty
Sinha also said the Mauritius government had agreed to discuss the nodalities to review the 23-year-old double taxation avoidance treaty. India has been keen on the review to include provisions in the treaty to prevent firms escaping the capital gains tax payment by misusing the clauses in the treaty.