Incorrect pan updated in bank account - repercussions
I always appreciate the help provided here.
I have a query regarding the income from other sources(bank FDs).
I have a salary account with a private bank.
I gave my PAN number while opening the account but somehow bank has updated it incorrectly. There is a one letter mismatch in the PAN number.
1. I want to ask, what will happen to the TDS which is deducted by bank for the interest on FDs(FDs which I have made in the bank) ?
2. Am I right in saying that this TDS will not be reflected in my "Form 26AS" ?
3. Is it also true that income tax deptt will NOT come to know about the income by these FDs and also the TDS that is deducted by the bank on the interest earned on these FDs?
4. In my case, bank is deducting 10% TDS on the interest earned on FDs. I come in 30% tax bracket. As my PAN is wrong with bank, the income and TDS, both are not shown in Form26AS. I do not have to pay extra 20% tax on this interest income because it is not updated in form26AS.
If I update the PAN in my bank account, both income and TDS will start showing in Form26AS correctly. And then I have to pay extra 20% tax on this income earned by interest. So, won't it will be a loss of 20% tax for me ?
Awaiting your valuable response.
Thanks very much.
Asked 3 years ago in Income Tax from Ghaziabad, Uttar Pradesh
You have to request the banker to file a correction statement with NSDL giving correct PAN No.
That is right.
That is not correct. If pan data such as name and no is a mismatch, they will direct the bank to pay TDS @ 20%.
That is not correct your income has been reported to income tax department by the banker later on department will collect income tax with penal interest.
This is a short sighted policy and you cannot run away from the income tax department.
1. In the first query if wrong PAN is being taken by Bank then your TDS deducted will not be shown in your Form 26AS and you will not get credit for the TDS deducted.
2. Yes TDS will not be reflected in form 26AS
3. If the TDS is being reflected in other PAN No. of the customer of the Bank then his online Form26 AS will show the same and he will clarify the same with the Bank and the Bank will have to rectify the same after asking you the correct PAN. Income Tax department can send you asking for details as per the name and Address provided in the Bank records.
4. See we suggest you to declare correct PAN in Bank records and if you come in 30% bracket, pay the 20% difference in order to avoid any future complications. If the department come to know of the same you need to pay the same with interest and penalty.
U can still get into trouble for avoiding tax. In case the credit of TDS is reflected in a third party. He happens to be a n income tax assesse. He would get in touch with your bank that he has no relation with your bank. Then the bank gets in touch with you asking you your PAN card copy. You give your pan card copy and all the previous Tds returns are revised. Credit is reflected in your account. You have not considered the income. You il be asked to pay tax from the beginning with interest and penalty. The department is now computer and systems driven. There are better ways to plan tax.