What to Do When Wrong PAN Is Reported by Banks — TaxBuddy’s Fix
- Asharam Swain
- Nov 6, 2025
- 8 min read
Wrong PAN information reported by banks often triggers immediate tax complications, including incorrect TDS entries, Form 26AS mismatches, and higher TDS deduction at 20%. These errors disrupt refund processing and create avoidable compliance hurdles for taxpayers. The issue usually arises during account opening or interest reporting when outdated or incorrect PAN details are used. Correcting it requires quick coordination with the bank, verification of PAN details on the Income Tax e-filing portal, and ensuring the bank files a correction statement with NSDL. A structured approach prevents revenue loss and ensures accurate tax credit reflection.
Table of Contents
Why Wrong PAN Reporting Happens in Banking Systems
Wrong PAN entries mostly occur during account opening, form updates, or TDS reporting cycles when outdated, mismatched, or manually entered information is used. Many banks rely on legacy systems where customer data is partially migrated, causing older PAN entries to remain linked to new accounts. Human error during data entry is another common trigger, especially when multiple accounts exist under similar names. Sometimes, incorrect PAN is pulled from old KYC records if customers forget to update details after PAN reissuance or correction. These issues lead to inconsistent PAN–account mapping, affecting the tax credit trail.
Impact of Wrong PAN on TDS, Form 26AS, and Tax Filing
A wrong PAN disrupts the tax chain from the first step. The bank deducts TDS under Section 194A on interest income and reports it to the Income Tax Department, but the credit gets mapped to someone else’s PAN. This results in missing TDS credit in Form 26AS, an inflated tax liability during ITR filing, and delayed refunds. When the PAN is invalid or mismatched, banks often default to a 20% TDS deduction under Section 206AA, causing unnecessary excess tax outflow. High-value transactions may also fail PAN validation, leading to compliance flags and potential notices.
What to Do Immediately When a Bank Reports a Wrong PAN
An incorrect PAN entry requires swift action to prevent TDS mismatches and refund delays. The first step is informing the bank through a written request and sharing the correct PAN proof. Once the bank validates the details, it initiates a correction statement with NSDL to update the PAN linked with interest income and TDS. The individual should then monitor Form 26AS and AIS for updates while ensuring that the corrected PAN reflects accurately on the Income Tax portal under account profile and bank linkage. Corrective action at both the bank and department ends ensures credit flows to the right PAN.
How to Verify PAN Details on the Income Tax Portal
The Income Tax portal provides a quick way to confirm whether PAN information is correctly mapped. Under “My Profile,” the “PAN Details” section displays basic demographic information, while the “My Bank Account” tab shows all validated accounts linked to the PAN. Any mismatch in PAN name, Aadhaar details, or bank linkage appears as a validation failure. The portal helps track whether the bank has completed the correction and allows the taxpayer to check if any TDS credited against interest income has started reflecting in Form 26AS or AIS after the correction is processed.
Documents Required to Correct Wrong PAN Reported by Banks
Banks typically require a self-attested copy of the correct PAN card, an identity proof such as Aadhaar or voter ID, and a filled PAN correction request form or KYC update form. Some banks may also request the original PAN for on-the-spot verification. For online or digital submissions, scanned copies are sufficient, but the accuracy of details becomes crucial to avoid further mismatches. If multiple accounts exist in the same branch, banks insist on updating all related accounts to maintain uniformity across customer records. These documents help validate identity and authorise the correction filing process.
How Banks File PAN Correction Statements with NSDL
Banks use the TDS Correction Statement mechanism through NSDL’s portal to update the PAN associated with interest income and TDS deductions. Once the customer submits the correct PAN, the bank validates the details, updates its internal system, and files a revised TDS return reflecting the corrected PAN. NSDL processes this revised statement, and the updated information flows to the Income Tax database. Within a few weeks, the corrected TDS entries start appearing in Form 26AS and AIS. This systematic update ensures accurate reporting and restores proper tax credit entitlement for the individual.
How a Wrong PAN Affects High-Value Transactions and Compliance
High-value transactions such as fixed deposits, large withdrawals, investments, or property-linked payments depend heavily on PAN validation. When a wrong PAN is attached to a bank account, these transactions fail to register correctly in the SFT (Specified Financial Transactions) database. This creates inconsistencies between bank-reported data and the taxpayer’s records, often triggering compliance checks or e-campaign alerts. The mismatch can also cause delays in transaction processing or additional documentation demands. Ensuring the correct PAN prevents these discrepancies from turning into scrutiny-level issues.
How to Correct PAN–Aadhaar Mismatches to Avoid TDS Issues
A PAN–Aadhaar mismatch creates an additional layer of complications because all PAN-based validations now rely on Aadhaar linkage. If PAN and Aadhaar have differing demographic details, validation failures occur both at banks and the Income Tax portal. Correction can be made via authorized online portals that allow PAN data updates or Aadhaar detail rectification. Once both databases align, banks can revalidate the PAN, and the corrected details begin to reflect across TDS records. Fixing these mismatches is essential to prevent blocked bank validations, failed auto-verification, and higher default TDS deductions.
Can PAN Be Updated Through the Income Tax Portal?
The Income Tax portal does not allow direct editing of PAN details because PAN is issued by external authorities. However, the portal helps validate whether a PAN is correct and linked to Aadhaar. For corrections like name changes, date of birth errors, or incorrect demographic details, the update must be done through authorized PAN service providers. Once the correction is completed, the updated PAN details automatically sync with the Income Tax portal. The portal can also confirm whether the corrected PAN has been successfully mapped with the user’s bank accounts.
How TaxBuddy Simplifies PAN Correction and TDS Mismatch Resolution
TaxBuddy helps streamline this process by offering structured guidance to resolve incorrect PAN reporting. The platform assists users in identifying mismatches between PAN, bank records, Form 26AS, AIS, and TDS statements. It simplifies documentation, outlines the specific correction path required, and ensures the individual knows what to submit to the bank. TaxBuddy also helps track whether corrected TDS entries have started reflecting in the Income Tax system, ensuring smoother ITR filing and preventing unnecessary demands or refund delays. Its AI-driven system minimises errors and improves the accuracy of tax records.
Conclusion
Wrong PAN reporting can trigger a chain of tax mismatches, higher deductions, and compliance concerns, but timely correction keeps the tax credit trail intact. Ensuring accurate PAN–bank linkage, updated Aadhaar details, and validated information on the Income Tax portal prevents these issues from escalating. For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. What should be done if a bank has reported the wrong PAN? The bank must be informed immediately so it can verify the correct PAN and initiate a correction statement with NSDL. Until the corrected statement is processed, the TDS credit may not appear in Form 26AS or AIS. After submitting proof of the correct PAN, monitoring the Income Tax portal under “My Profile → My Bank Account” helps ensure that the revised data gets successfully updated across the tax system.
Q2. How long does it usually take to correct a wrong PAN reported by banks? Most banks take about 5–7 working days to file a TDS correction statement, after which NSDL processes the request. The corrected PAN begins reflecting in Form 26AS within a few weeks. The timeline varies depending on batch filings, bank workload, and the date of the TDS return revision. Monitoring AIS and 26AS helps track when the correction is fully applied.
Q3. Can a wrong PAN affect TDS credit and income tax filing? Yes. If the wrong PAN is reported, the TDS deducted by the bank will not reflect against the correct individual’s Form 26AS. This leads to mismatched tax credits, inflated tax liability during filing, and delayed refunds. Banks may also deduct TDS at a higher rate of 20% if PAN validation fails, increasing tax outflow unnecessarily. Correcting the PAN association is essential for a smooth filing process.
Q4. Can PAN details be corrected online without visiting the bank? PAN demographic corrections such as name, date of birth, or Aadhaar mismatch, can be updated online through authorized PAN service portals. However, if the bank has reported the wrong PAN in its TDS filings or KYC records, the correction request must be submitted directly to the bank. The bank alone has the authority to revise the PAN through NSDL’s correction statement mechanism.
Q5. What documents are required to fix wrong PAN reporting by a bank? Banks typically ask for a self-attested PAN card copy, an Aadhaar card or another identity proof, and a filled KYC or PAN updation form. Some banks may call for branch-level verification of the original PAN. If multiple accounts exist, banks may insist on updating the PAN across all linked accounts to maintain consistency in their database.
Q6. How does TaxBuddy help in resolving wrong PAN–related issues? TaxBuddy provides guided support for identifying mismatches between bank-reported TDS, Form 26AS entries, AIS data, and PAN records. The platform assists in understanding the exact nature of the error, provides document checklists, outlines the correction steps for banks and PAN authorities, and helps track when TDS entries begin reflecting correctly. This ensures fewer filing errors and prevents avoidable tax demands or delays.
Q7. Why does wrong PAN reporting trigger higher TDS deductions under Section 206AA? Banks are required to deduct TDS at 20% if the PAN is invalid or not correctly associated with an account. When a wrong PAN is reported, the system treats it as a missing PAN, automatically applying the higher rate. This can lead to a significantly higher TDS outflow, which may take months to recover through refunds unless corrected quickly.
Q8. Does Form 26AS update automatically once the PAN is corrected? After the bank files the revised TDS return, NSDL processes the correction and sends updated data to the Income Tax Department. Form 26AS typically reflects the corrected entries in the following update cycle. AIS may take additional time to sync. Regularly checking both helps confirm whether the correction is complete.
Q9. Will a wrong PAN affect high-value financial transactions? Yes. Transactions like fixed deposits, investments, cash deposits, credit card payments, or property-linked payments depend on PAN for reporting under SFT rules. If the wrong PAN is attached, these transactions may either fail validation or get reported under the incorrect PAN holder, creating compliance flags. In some cases, notification alerts from the department may be triggered due to mismatch between reported and actual financial activity.
Q10. What should be done if Aadhaar and PAN details do not match? A mismatch between PAN and Aadhaar can interrupt verification processes at both banks and the Income Tax portal. Individuals can correct demographic details on Aadhaar or submit PAN correction requests through official portals. Once both documents align, PAN validation at banks becomes smoother, and TDS reporting issues are reduced significantly.
Q11. Can PAN be updated directly on the Income Tax portal? The Income Tax portal does not permit users to edit PAN data directly because PAN is issued by external authorities. However, the portal reflects updated information once PAN corrections are processed through authorised agencies. The portal does allow users to verify whether the PAN is active, linked to Aadhaar, and properly mapped with bank accounts for refund and e-verification purposes.
Q12. How often should PAN and bank linkage be checked for errors? Checking the PAN–bank linkage once every few months is recommended, especially before tax filing season. Monitoring Form 26AS, AIS, and bank validations helps catch inconsistencies early. Situations such as account transfers, new FDs, KYC updates, or PAN corrections warrant an immediate revalidation check to avoid downstream issues in tax reporting.
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