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The Directorate of Income Tax (Systems) has written to the finance ministry, conveying its concern about the misuse of PAN cards, and asking it to make the verification process fool-proof. “The decision had to be put on hold because there were a lot of representations from people saying the requirement to show originals along with self-attested documents would slow down the process and make it cumbersome. We have put out I-T department’s concerns to the finance ministry,” said an official involved in the process, who did not wish to be identified.
At present, it takes about 15 days to get a new PAN allotted. However, PAN can be obtained in around five days if application is made through Internet and processing fee paid through credit card. The new verification norms may delay the process.
The Central Board of Direct Taxes (CBDT) is now re-looking at the procedure of PAN allotment and would come up with a solution, which helps address the concerns of the I-T department as well as genuine applicants of PAN. It is considering various options, including making it optional for some category of applicants to furnish the hard copy of original documents.
There are about 160 million PAN card holders in India. UTI Infrastructure Technology and Services Ltd (UTIITSL) and National Securities Depository Limited (NSDL) are two providers of the PAN card. However, with more than 14 million of new PAN cards issued every year, these agencies are not able to verify details of everyone despite having a huge country-wide network.
Officials said the stringent PAN application norms on January 24 were introduced to check false documents, particularly by foreign national and non-resident Indians. Ironically, the decision had to be put on hold on January 30 mainly because of the concerns raised by this very category of people. Since elections are due in a couple of months, the government doesn’t want to annoy anyone. So, the new norms may come after the new government takes over after the polls.
“There is a lot of resistance. NRIs are asking to whom they would send their original documents. People in the country also have problem in appearing in person as they cannot leave original documents with consultants,” said an executive with UTIITSL.
PAN cards allotted to a person is a unique identification number that helps tax authorities track compliance by linking all transactions of an individual such as tax payments, tax credits, return of income, wealth, gift and various specified transactions. It works as a proof of identity and helps at places such as opening a bank account. Duplicate PANs help people evade taxes. This prompted the ministry to come out with new PAN norms.
To compensate the PAN card providers for the increased workload in view of the new verification norms, the government had increased the processing fee by Rs 9. At present, if the communication address is within India, the processing fee is Rs 96 (Rs 85 plus 12.36 per cent service tax). It was increased to Rs 105 before the decision was put in abeyance. If the communication address is outside India, the fee is Rs 962-plus dispatch charges. The proposed fee is Rs 971.
