NEWS – Cabinet approves  PAN 2.0 Project

WHAT IS PAN 2.0?

• Objective: The PAN 2.0 project aims to upgrade the existing Permanent Account Number (PAN) system.
• Cabinet Approval: The Union Cabinet approved the project on November 25, 2024, with a financial allocation of Rs 1,435 crore.
• Features:
  • QR Code: A QR code will be added to all new and existing PAN cards.
  • Common Identifier: PAN will be merged with other identification systems, making it a unified identifier for businesses and individuals.
  • Online System: The upgrade will include a completely paperless, online process for applying and managing PAN cards.

KEY FEATURES OF PAN 2.0

• QR Code Integration: All PAN cards will have a QR code for seamless integration with the tax department and financial transactions.
• Data Vault System: A mandatory PAN data vault will be set up for businesses and institutions handling PAN-related data, ensuring data protection and cybersecurity.
• Unified Portal: A new online portal will consolidate all PAN services, improving accessibility and ease of use.
• Paperless Process: The process will be entirely online and paperless, improving service delivery and ease of access.

WHY IS PAN 2.0 IMPORTANT?

• For Individuals:
  • The upgrade to a QR code-enabled PAN card will be free.
  • Existing holders can apply for a new card or regenerate their old cards with the QR code feature.
  • This will enhance the integration of personal financial transactions with the tax department.
• For Businesses:
  • Businesses will have a common system for all tax-related filings and returns.
  • PAN will serve as the primary identifier for businesses in all government digital systems, reducing the need for multiple identification numbers.

WHAT DOES PAN DO?

• Identification for Taxation: PAN links a person’s financial transactions (e.g., tax payments, TDS, income returns) with the Income Tax Department.
• Permanent Number: Once issued, PAN remains the same throughout an individual’s life and is required for filing income tax returns.

EXISTING IDENTIFICATION NUMBERS

• TAN (Tax Deduction and Collection Account Number): A 10-digit alphanumeric number needed for individuals or businesses deducting tax at source. It is mandatory for filing TDS/TCS returns and related payments.

IMPACT OF PAN 2.0

• Seamless Taxation: PAN 2.0 will allow for an integrated tax system, benefiting both individuals and businesses.
• Improved Security: The data vault system will ensure that PAN data is stored securely, reducing the risk of data breaches.
• Technology-Driven Transformation: The project focuses on modernizing the taxpayer registration services and making them more efficient and user-friendly.