Tax Defaulter? Your PAN Could Get Blocked

By BankBazaar | June 23, 2016

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The Income Tax Department is considering blocking the PAN of those who have defaulted on their taxes. Non-filers of tax returns may also be included in this list. In its Central Action Plan for 2016, the Indian Income Tax Department has given directives to block the PAN of tax defaulters. The LPG subsidy, however, may not be cut for such defaulters. The worst part is that the Income Tax Department will share the names of such defaulters with credit agencies (of course, after giving due notice to the defaulter). The intent is ensure that the defaulters are not sanctioned loans or overdraft facility by banks. The Income Tax department feels that loans such as these could become Non Performing Assets (NPAs). Since LPG subsidies are directly credited to bank accounts, the department wants to block these too.

We are not done yet. The names of the defaulters may also be shared with the Registrar of Properties. This is to ensure that the tax defaulters do not make transactions relating to immovable assets. Note that if you are a tax defaulter, your name might already be in the public domain on the Income Tax department’s website.

Also, tax officers have been asked to impose fines and initiate prosecution if they find wilful tax defaulters. Actions might be taken under the penal codes 271F and 276CC. The current penalty ranges between Rs. 1000 and Rs. 5000 and imprisonment of three months to seven years along with a fine.

There’s more! The Income Tax department has started a pilot project for monitoring non-filers known as the Non-filers Monitoring System. And did you know that the advance tax payment date for individuals has been brought forward to June 15? This is relevant for all those who have a tax liability of Rs. 10,000 or more. The last date for filing your tax returns is 31st July. So, don’t delay filing your returns and paying your taxes.

Additional Reading: Are You An Honest Tax Payer?

E-insurance is now mandatory

In a bid to supplement physical policies that can get misplaced, the Insurance Regulatory and Development Authority of India (IRDA) has now made it mandatory to issue insurance electronically (called e-insurance) for all policies whose annual premium is Rs. 10,000 and above. This is only for life insurance policies. This is expected to come into effect from 1st October  this year. You will just need your PAN or Aadhaar card for the KYC process.

So, what exactly is e-insurance? It is an insurance policy issued electronically and is an evidence of an insurance contract between you and the insurer. It is digitally signed. For getting your e-insurance you need to have your e-insurance account in place. This is an electronic account that you need to open with the insurance repository. Here, all your insurance policies (from all companies) will be deposited and held in electronic form. You will be provided with an electronic Account Number called eIA after you open the account.

Also, now when you want to purchase an insurance policy you will be presented with an e-proposal instead of a physical proposal. This is approved by IRDA. This e-proposal will capture all of the information regarding the policy in electronic form. So, your policy will get processed quickly. Note that a physical policy may or may not be issued along with the e-insurance policy.

You get e-insurance for your General Insurance policies as well. IRDA has said that all General Insurance policies including personal accident cover and domestic travel insurance, with yearly premiums above Rs. 5,000 need to be issued in the electronic form. This, however, will be slightly different for Motor Insurance and foreign Travel policies. In case of these policies, all policies, irrespective of the premium amount, have to be issued in the electronic form.

Another bit of good news for online enthusiasts: Now, IRDA has approved e-commerce sites selling insurance policies. This is also expected to bring down the cost of insurance policies. Electronic signatures will be used for this purpose. This means that insurance policies are now just a click away.

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Category: Money Management

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