Your Permanent Account Number (PAN) is one of the most important documents you hold for financial transactions in India. It's required for filing income tax returns, opening bank accounts, and investing in securities. However, recent reports have highlighted a growing concern: your PAN card could be misused for fake loans, fraudulent activities, and identity theft.

While your PAN number itself doesn’t reveal sensitive personal information, it’s still a unique identifier that can be used in multiple financial transactions. If misused, it can lead to financial losses and compromised personal security.

Let’s understand how fraudsters are targeting PAN holders and what steps you can take to protect your PAN from being misused.

1. How Fraudsters Use PAN for Fake Loans and Fraudulent Activities

Fraudsters are increasingly using stolen or fake PAN numbers to apply for loans and carry out fraudulent activities. Here are some common ways in which this can happen:

a. Taking Fake Loans Using Your PAN

· Loan Application: Criminals may steal your PAN details and use them to apply for loans in your name. By providing fake income proofs or altered documents, they can trick banks or financial institutions into approving the loan.

· Identity Theft: Once the loan is approved, the money is disbursed into the fraudster’s bank account. Since the loan is under your PAN, you may be liable for repayment, even though you never applied for the loan.

· Multiple Loan Applications: If your PAN number is misused, fraudsters can apply for multiple loans or credit cards, using your personal details, which can lead to significant financial losses and a damaged credit score.

b. Fraudulent Tax Filings

· Fake Income Tax Returns (ITRs): Criminals can file false income tax returns using your PAN details and claim a refund. Since PAN is linked to your bank account, the refund amount may be transferred to a fraudster’s account.

· Tax Evasion: Fraudsters may also use stolen PANs to manipulate tax filings and avoid paying taxes, making it difficult for the authorities to trace the actual culprit.

c. Opening bank Accounts and Credit Cards

· Using a stolen PAN card, fraudsters may open bank accounts, apply for credit cards, or avail of financial services. They can conduct money laundering or illegal transactions, leaving you with a tarnished financial reputation.

d. Investment Scams and Fraudulent KYC

· Fake Investment Schemes: Fraudsters can use your PAN number to invest in fraudulent schemes under your name, which can lead to your finances being tied up in scams.

· KYC Manipulation: In some cases, fraudsters may use your PAN details for KYC (Know Your Customer) processes, gaining access to various financial products or even online wallets, without your consent.

2. Signs That Your PAN May Be Misused

If your PAN card has been compromised, here are some warning signs to look out for:

· Unexpected Loan Approvals: If you’re being contacted by lenders or financial institutions about loans or credit cards that you did not apply for, this could be a sign of PAN misuse.

· Tax Notices: Receiving tax notices or reminders for unpaid taxes that you have no knowledge of can indicate that your PAN is being used for fraudulent tax filings.

· Low Credit Score: A sudden drop in your credit score due to unapproved loans or credit cards can be a result of fraudulent activity linked to your PAN.

· Bank Account or Credit Card Discrepancies: If you notice any unauthorized transactions or unexplained accounts being opened in your name, it could be linked to the misuse of your PAN.

3. How to Protect Your PAN from Misuse

To safeguard yourself from PAN misuse, here are some precautionary steps you should take:

a. Keep Your PAN Details Confidential

· Do not share your PAN unnecessarily with others. Be cautious when submitting your PAN for any online or offline application.

· Avoid sharing PAN details through unsecured emails or messages. Scammers often use phishing methods to collect personal information like PAN, Aadhaar, and bank account details.

b. Regularly Monitor Your Financial Accounts

· Monitor your credit score through CIBIL or other credit rating agencies to ensure that no unauthorized loans or credit cards are taken in your name.

· Check your bank statements regularly for any transactions you don’t recognize. Also, ensure that your KYC details are up to date and not misused.

c. Freeze Your PAN or Report It to the Authorities

· Lock or freeze your PAN if you believe it is compromised. The Income Tax Department allows you to lock your PAN temporarily to prevent misuse. This can be done through the official e-Filing portal.

· If your PAN is misused, immediately report it to the police and file a complaint with the Income Tax Department. Provide them with the necessary documentation and evidence of fraud.

d. Use EPF, UAN, and Aadhaar Linked with PAN

· Ensure that your EPF (Employees’ Provident Fund) and UAN (Universal Account Number) are linked to your PAN to track any fraudulent transactions. Similarly, link your Aadhaar with your PAN to ensure better identification and avoid misuse.

e. Enable Alerts and Notifications

· Set up email and SMS alerts for all financial transactions and loan-related activities. This will help you quickly identify any suspicious activity and take corrective action.

4. Steps to Take if Your PAN Is Misused

If you suspect that your PAN is being used fraudulently, here’s what you should do immediately:

a. Inform the police and Financial Institutions

· File a FIR (First Information Report) with the local police regarding the misuse of your PAN.

· Contact the relevant banks and financial institutions to inform them about the fraudulent activity.

b. Report to the Income Tax Department

· Use the Income Tax Department’s e-Filing Portal to report fake loans or fraudulent tax filings.

· You may need to submit evidence of fraud, such as loan rejection notices or unauthorized transactions.

c. File a Complaint with the Cyber Crime Cell

· If the misuse involves online fraud, file a complaint with the Cyber Crime Cell to track and block any further fraudulent activities linked to your PAN.

d. Apply for a New PAN (if necessary)

· In extreme cases of identity theft, you may need to apply for a new PAN. The Income Tax Department will guide you through the process of reissuing a new PAN.

5. Conclusion: Stay Vigilant and Protect Your PAN

Your PAN card is a valuable document, but it can also be misused for financial fraud if not handled carefully. Be vigilant and adopt the necessary precautions to protect your PAN from being compromised. Regularly monitor your financial accounts, ensure that your PAN is only shared with trusted entities, and report any suspicious activity immediately to prevent fraudulent activities linked to your identity.

By staying informed and proactive, you can safeguard your PAN from misuse and avoid the consequences of financial fraud and identity theft.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.