How your PAN can be misused by someone else:
We know very well that PAN nowadays became a basic proof to carry on various financial transactions. This lead to so many fraud activities some people are performing via PAN. Here are some ways in which your PAN can be misused.
For example while booking Tatkal ticket, you may quote your PAN card number if you are booking via online by IRCTC website. Otherwise you may attach a xerox copy of your PAN and submit along with the reservation form at counter. Both of these ways are not good at all. So depend upon ID proofs other than PAN.
But why I should avoid PAN as proof for Indian Railways?
If you are giving PAN number as a proof of identity then, you may notice that while boarding train your PAN number along with Name and Gender is displayed on the reservation chart. Some binami persons may misuse this information.
Indian Railways have to release notice so that full PAN number should not be quoted on reservation charts. I still don’t know whether there are any instructions on this regard already released or not. I am still noticing the full PAN number on the reservation chart.
Update: Railways now displaying only last digits of the PAN card so that PAN misuse can be avoided.
According to financial Act to curb black money in India, there is a rule that every jewellery trader in India have to collect tax at source if some customer is going to buy jewellery worth 2 lakhs (I am not sure about the limit whether it is 2or 5 lakhs) or more, then the trader have to collect PAN details so that they can process them for various TDS activities. But many people are reluctant of quoting PAN because at a later stage they may be questioned by Income Tax officers regarding how they got such a huge money in their hands. So Jewellery traders are now depending upon some binami PAN numbers collected from Railway reservation charts. They are especially hiring some people to collect PAN details.
What happens if someone is using my PAN number for their transactions?
Even though if you are not related with the original transaction, if someone is going to quote your PAN for TDS, TCS or for some thing else, it will be recorded in your Form 26AS at later. Those who use Form 26AS Income Tax Statement for Income Tax return may know very well about its usage. But those who don’t know about it at all may not even find out that someone else is misusing their PAN. So if suspicious activity is being performed by that PAN, income tax accessing officer may later call the PAN number person and ask him/her regarding that transaction. You may be totally innocent but still you have to face tax department. See how someone is misusing your PAN smartly!
If someone is able to get your xerox copy of the PAN, then also it may be misused to obtain a loan or credit card or something else in your name. So be careful when you are signing a xerox copy of the form. Some people may not be eligible to get loans due to bad financial records or low CIBIL score or any other reason. Such people may try to benefit from your PAN. Remember these type of activities can only be performed by people who are close to you. So better judge your real friends and fake friends.
Chances are also there some suspicious person may try to register on the Income tax website and try to file income tax return by using your PAN number. In order to register on the site the person should have to know your surname and date of birth correctly. This can be easily traced by your social profile. So be careful sharing your date of birth publicly on the social media. Recently a scam came into light where a person got a refund of four crore rupees from tax department by giving fake PAN numbers of other people.
Steps you have to take to avoid the misuse of PAN
My first advice to you is don’t give PAN as an identity proof if there is a possibility of giving some other ID as proof. Mention PAN only when it is necessary. Otherwise depend upon voter ID, or driving license.
Even just sharing your PAN number with someone whom you can’t trust is also not good. So avoid sharing PAN number also.
Some suspicious persons may try to trace your PAN if they know some basic details about you. Like your surname, date of birth and in some cases your father’s name. For instance official income tax website provide a service tofor your benefit. But actually this service may also be misused by someone else.
Have some clarity regardingand do visit it at least twice in a year to make sure that everything is fine with your PAN card.