The Union Cabinet has approved the PAN 2.0 Project of the Income Tax Department, which comes with a financial outlay of Rs 1,435 crore. This initiative aims to fully upgrade the current PAN system, revamp the IT infrastructure, and establish PAN as a universal business identifier across various digital platforms of designated government agencies, as announced by Union Information and Broadcasting Minister Ashwini Vaishnaw during the Cabinet briefing on Monday.
So, all PAN/ TAN/ TIN will be clubbed under this system. The project aims to establish PAN as a "common business identifier" for the digital systems of designated government agencies. It will provide a single digital portal, enable paperless services, and enhance the mechanisms for addressing grievances.
The 10-digit alphanumeric PAN given by the Income Tax Department will be improved by including a QR code, and this will be done by completely an online process. With the upgrade, PAN is anticipated to serve as a reliable source of identification and information for authorities, especially since it is already connected to the Aadhaar identification number.
"One of the most important features would be a PAN data vault system. The PAN-related information is used by many entities such as banks, and insurance companies. We give details of PAN at various places. So, those (entities) who take details of PAN, they will have to keep PAN data safely, mandatorily through the data vault system,” Vaishnaw said on Monday. Approximately 78 crore PANs have been issued so far, with 98% of them belonging to individuals.
Will you need to apply for a new PAN?
No, existing PAN holders won't need to apply for a new PAN under the PAN 2.0 Project. However, they will have the option to upgrade to the new PAN 2.0 card. The government has confirmed that all current PAN cards will remain valid even after the upgrade.
Will there be a charge for a new PAN card?
No, taxpayers will not incur any costs. As part of the project, new PAN cards with enhanced features, such as a QR code for better security, will be provided free of charge.
What about those with older PAN cards?
Older PAN cards will continue to be valid. New cards with upgraded features, including QR codes, will be issued to all holders, but it is not mandatory to switch from existing PANs.
According to Aseem Mowar, Tax Partner, EY India, this initiative is expected to benefit not only large businesses but also small businesses and the average middle-class taxpayer by addressing compliance costs and streamlining business operations.
With the underlying objective of creating a single source of truth through a unified portal, as well as ensuring ease and speedy delivery of services, the project should significantly simplify tax-related processes and enable more efficient digital integration with government services.
"The significant step of creating and deploying a QR code in the PAN 2.0 system will automatically bring in inherent efficiencies and allow for quick and easy access to information simply by scanning. This technological upgrade of the PAN will be a great boon to small-scale businesses, ensuring minimal or no errors and thus safeguarding against the loss of tax credits," stated Mowar.