PAN 2.0: What’s Changing for Indian Taxpayers and Businesses – Do You Need to Get a New Card?
The PAN 2.0 Project is an initiative by the Indian Income Tax Department to modernize the Permanent Account Number (PAN) system.
What is the PAN 2.0 Project, and how does it consolidate TAN, TIN, and other business identifiers into a unified system?
The PAN 2.0 Project, a ₹1,435 crore initiative, aims to make the PAN a "common business identifier" across all digital systems of specified government agencies. This will create a unified digital portal for all PAN-related services, enabling paperless operations and improved grievance redressal mechanisms. The project will introduce QR-enabled PAN cards, enhancing security and allowing for easier validation of PAN details.
It was previously stated that multiple identification numbers were unnecessary and that a single identifier would be more beneficial. The project aims to consolidate efforts to make the PAN the common business identifier. PAN/ TAN/ TIN will be clubbed under this system.
Reasons for Implementing PAN 2.0
According to broadcasting minister Ashwini Vaishnaw, there were repeated requests from the industry to have a common business identifier to simplify interactions with various government agencies. The PAN 2.0 project seeks to fulfil this need by using PAN as the common identifier.
Benefits and Features of PAN 2.0
The new system introduces several benefits:
- Unified Portal: A single online platform will be available for all PAN-related services.
- Security Upgrades: QR codes and mandatory PAN Data Vaults will enhance cybersecurity.
- Faster Services: The project aims to deliver speedy, eco-friendly, and cost-effective taxpayer services with an improved grievance redressal system.
- Enhanced Consistency: A “single source of truth” system will improve data consistency.
- QR Code Validation: The QR code, incorporated in PAN cards since 2017-18, helps validate the PAN and its details through a specific reader application.
- Minimizing Duplicate PANs: Advanced logic in the new system will identify and minimize duplicate PANs. Holders of multiple PANs should deactivate extras as required by the Income-tax Act, 1961.
How the New System Impacts Businesses?
Businesses that are required to have a PAN will experience reduced paperwork as the PAN will serve as a common identifier across government platforms. This will improve coordination with various agencies, including financial institutions and state departments.
- Will existing PAN card holders be required to apply for a new PAN under the upgraded system?
- No, existing PAN holders are not required to apply for a new PAN under the PAN 2.0 Project. Holders of older PAN cards without QR codes may optionally request a new one, but it's not mandatory. The government has stated that all existing PAN cards will remain valid even after the upgrade.
- How will the new PAN be delivered? When will the new PAN card get delivered?
- The upgraded electronic PAN (e-PAN) will be sent directly to users' registered email addresses at no cost as part of a paperless initiative. For those requiring a physical PAN card, a specific request must be made, with a fee of Rs 50 for domestic delivery and Rs 15 plus actual India Post charges for international delivery. A new PAN card will only be issued if the PAN holder requests it, as upgrading to the new PAN card is not compulsory.
- Will the older PAN continue to function as it is?
- Yes, older PAN cards will continue to be valid even without a QR code. The PAN 2.0 Project aims to upgrade the PAN system and introduce QR-enabled cards, but older cards will remain functional.
- Do people have an option to get corrections done on PAN, like name, spelling, address change, etc?
- Existing PAN card holders will have the option to make corrections or updates to their details—such as name, address, and demographic information—free of charge once the PAN 2.0 system is active.
- Until the new system is rolled out, users can utilize an Aadhaar-based online facility to update certain details like email and mobile number at no cost. This can be done through designated online portals.
- What’s the cost for PAN services under PAN 2.0?
- There will be no cost for taxpayers for PAN services under PAN 2.0, unless you requested for a physical delivery of the new PAN card. This includes new PAN cards with enhanced features like a QR code.
- What is the Common Business Identifier?
- The Common Business Identifier (CBI) is a significant element of the PAN 2.0 project. The goal is to establish a single identifier that businesses will utilize across all government platforms. This is intended to simplify interactions with agencies like financial institutions and state departments by reducing paperwork and improving coordination. The PAN itself will be used as the CBI.
Current Status and Application Process
Around 78 crore PANs have been issued so far, with 98% belonging to individuals. The Income Tax Department has not yet specified the details of the application process and timeline for the complete rollout of PAN 2.0.