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Deregistering an inactive tax identity is critical for robust tax compliance in Nepal. Present Consultants Private Limited provides seamless guidance through the complete closure of personal PAN, ensuring accurate tax filing, clearing outstanding dues, and mitigating long-term regulatory penalties.
₨ 5,000.00
The process for the closure of personal PAN is a highly structured legal procedure regulated by the Inland Revenue Department (IRD). Under Nepalese tax jurisprudence, once a Permanent Account Number is issued to an individual under Section 78 of the Income Tax Act, 2058, it remains an active record within the Integrated Tax System (ITS) indefinitely. If an individual has ceased earning taxable income, migrated permanently, or closed a registered private proprietorship firm associated with that PAN, they must formally apply for deregistration.
The procedural workflow requires the taxpayer to submit an electronic application through the IRD Taxpayer Portal, settle all pending liabilities, undergo a comprehensive tax assessment, and receive a formal tax clearance certificate. A natural person cannot simply leave a PAN inactive; the formal closure method is the only legally recognized path to terminate ongoing compliance obligations.
Tax identity regulation is governed by Section 78 of the Income Tax Act, 2058, and Rules 23, 24 of the Income Tax Rules, 2059. To legally close a personal PAN, a taxpayer must submit an electronic de-registration application, file final income returns under Section 96, and clear all outstanding withholding taxes (TDS) under Sections 87, 88, and 89 to obtain an official tax clearance certificate.
Failing to close an inactive personal Permanent Account Number (PAN) or neglecting annual return filings triggers immediate statutory liabilities under the Income Tax Act of Nepal. Specifically, Section 117(1)(a) imposes a flat fine of NPR 5,000 per income year for non-submission of required returns, while Section 119 mandates interest at 15% per annum on all outstanding tax amounts from the due date until payment. Furthermore, under Section 117(1)(b), a failure to maintain accurate documentation required for account closure results in a penalty of NPR 1,000 or 1.5% of gross income, whichever is higher. Beyond these immediate financial penalties, maintaining an un-filed, active PAN profile violates domestic tax compliance protocols, restricts access to future state-level documentation, and empowers tax administrators to initiate asset recovery or blacklisting under Section 104.
