PAN card is not just an important document related to income tax but also your financial identity. According to Income Tax Laws, if the PAN number provided by a payee does not match during assessment of tax return, the tax payer shall be entitled to both fine and imprisonment.
7 Years’ Imprisonment
As per Section 114B of Income Tax, PAN card is mandatory for financial transactions over a certain value. Any person providing wrong PAN card information shall be liable to pay penalty of Rs. 20,000. On the other hand, failure to offer transaction details of an amount more than Rs. 25,000 can attract imprisonment of period ranging from 6 months to 7 years.
Offer Correct Information
It is necessary for both the buyer and seller of a property worth Rs. 5 lakhs or more to provide PAN number. Same is applicable when buying jewellery over Rs. 5 lakhs or paying bill amounting to Rs. 25,000 or more for staying in a hotel. Income tax department can easily track your business and transaction details, including loans, investments and almost every detail, through your PAN. Always provide correct information to stay away from troubles.
Why is PAN Necessary?
Registry Department can block your transactions any time if they realize you have not provided PAN details during financial transactions. Also, if a person working in a company has not provided PAN details, he would be liable to pay 20% TDS even though his taxable income might be only 10%. Since the person had not provided PAN details, he will neither be able to receive the amount, nor be able to claim the amount to the department.