On November 25th, Union Minister Ashwin Vaishnaw announced the approval of PAN 2.0 project by the Cabinet Committee on Economic Affairs. The panel, head by Prime Minister Narendra Modi has given its nod to the Rs 1435- crore project.
The 10-digit alphanumeric Permanent Account Number or PAN, issued by the Income Tax Department is set for a digital upgrade.
So what new changes, will be introduced?
Do you need to apply for a new PAN card?
A new PAN number or card is not needed. The present PAN cards will remain valid for use.
The system will introduce a QR Code for integrating all PAN services. But taxpayers can apply to update their cards with QR codes. This will be free of cost for existing users.
The QR-code feature on new and old PAN cards will mean an enhanced level of integration of financial transactions with the tax department.
What will the PAN 2.0 system achieve?
This upgrade will make PAN a common platform to monitor all digital transactions. The system will now have a centralised portal for all PAN-related services.
So the project will combine online receipt of applications, verification, de-duplication, processing, allotment, maintenance of data , printing and dispatch.
It will also push a paperless system to create a sustainable eco-friendly process.
Also, it will introduce a data vault to ensure protection of user data.
What is the PAN Data vault?
Union Minister Ashwini Vaishnaw shared that a PAN Data vault will also be created. This will be mandatory for all entities using PAN data.
The vault will safeguard personal data through enhanced cyber security measures.
Institutions like banks, insurance companies who use PAN data can keep it safe through the data vault.
How will PAN 2.0 impact the business sector?
This step had been eagerly demanded by the business sector. So PAN 2.0 will ease their tax documentation process.
Many people had brought to attention the need for a single identification number instead of multiple numbers.
So now PAN will become the common business identifier. All PAN/ TAN/ TIN will be clubbed under this system.
Businesses will now have a common system for filing various tax challans and returns.
This is a notable step since about 78 crore PAN cards have been issued so far. About 98% of the PAN cards are owned by individuals.
