PAN 2.0: What is it and how does it affect you; do you need a new one?

In line with the central government’s flagship programme Digital India, citizens will soon get a new PAN card with a QR code feature as the Centre announced the PAN 2.0 Project of the Income Tax Department.

An e-Governance project for re-engineering the business processes of taxpayer registration services, PAN 2.0 will be an upgrade of the current PAN/TAN 1.0 eco-system consolidating the core and non-core PAN/TAN activities as well as PAN validation service. It would ensure technology-driven transformation of PAN/TAN services for enhanced digital experience of the taxpayers.

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With the upgrade, PAN is expected to become a strong source of identification and information for the authorities, as it is already linked to the other identification number of Aadhaar.

The existing PAN holders, which are around 78 crore in number, will have to upgrade their PAN cards. The number or PAN will remain the same for existing users, but the card will need to be upgraded, which the government said would be free of cost for the users.

What is the PAN 2.0 Project?

The PAN 2.0 Project of the Income Tax Department, with a financial implication of Rs 1,435 crore, was approved by the Union Cabinet on Monday. Under the project, the existing PAN system will be upgraded completely, the IT backbone will be revamped and PAN will be made as a common business identifier for all digital systems of specified government agencies, Union Information and Broadcasting Minister Ashwini Vaishnaw said during the Cabinet briefing on Monday.

What are the features of PAN 2.0?

Apart from the QR-code feature for all new and existing PAN cards, the PAN 2.0 project aims to set up a unified portal along with a “mandatory PAN data vault system” for all entities using PAN data. This is being done for data protection and cybersecurity purposes.

This upgradation also means that it will be completely paperless and online. A lot of focus will be on the grievance redressal system.

What does this mean for individuals and businesses?

The QR-code feature on new and old PAN cards will mean an enhanced level of integration of financial transactions with the tax department. The QR code was introduced in PAN in 2017. The PAN 2.0 project intends to continue with this feature with enhancements, tax officials said.

For businesses, this would mean a seamless, common system for filing various tax challans and retuBenefits for Taxpayers

According to the official release, PAN 2.0 will offer several advantages to taxpayers, including:

Faster Service Delivery: Reduced processing times for PAN-related services.

Data Accuracy: Improved data consistency and fewer errors in taxpayer information.

Cost Savings: The upgrade will be free of charge for existing PAN cardholders.

Sustainability: The project emphasises eco-friendly practices by minimising paper usage.

The system will also focus on grievance redressal, addressing taxpayer queries more efficiently.

Do we need a new PAN card?

Union Minister Ashwini Vaishnaw clarified that existing PAN cards will remain valid. He said, “Citizens will not need to apply for new PAN numbers. The upgrade is aimed at enhancing functionality without affecting the validity of current cards.”

However, taxpayers will have the option to upgrade their cards with the new QR code features at no additional cost.