What is PAN 2.0: India’s New Digital Identity

Transforming India’s Digital Landscape with a revolution in the Tax Infrastructure System with PAN 2.0

In the present-day century, the underlying goal of any organization is to strive for digital integration of the existing systems and automate the processes to the maximum. With the same intent, the Government of India is constantly evolving its systems to stay ahead of the curve. One major step taken in this direction is the introduction of PAN 2.0, an upgraded and superior version of the traditional Permanent Account Number (PAN) system. In simplified language, PAN is a ten-character alphanumeric code, issued by the Income Tax Department to track all the financial transactions and prevent tax frauds. This PAN is absolutely unique to every individual or business firm, much like Aadhar and helps to maintain financial transparency while carrying out any monetary transaction. The release of PAN 2.0 will make a significant impact to strengthen India’s financial structure and make the full use of latest technological advancements, to help the citizens further.

What is PAN 2.0?

Let us simplify PAN 2.0 for you as the reader.

The upgraded PAN will not have a new number or change in the details shown on the PAN card, but a complete reformation of the entire PAN processing ecosystem. It involves digitizing and integrating the PAN process more deeply into India’s current tax system. The idea behind this initiative is to make the PAN more real-time, reliable, and enhance complete user-experience by incorporating new technology like the Artificial Intelligence (AI) and data analytics to conduct tasks seamlessly. The goal of PAN 2.0 is to revamp the PAN database into a dynamic, and updated storehouse that ensures proper identity verification of a person, stringent regulations to check frauds and provide valuable data whenever required. The objective is to optimize the process of issuing and managing PAN cards. Under this 2.0 initiative, applicants will receive e-PAN cards featuring a secure QR code, directly in their registered email IDs at no incurred charge. A nominal fee will be charged in case you prefer a physical PAN card. This new initiative is an e-Governance project of the Income Tax Dept. (ITD) for modifying the taxpaying processes involving any individual or business firm.

Major Features of PAN 2.0

PAN 2.0 as a big step project involves various different steps and focus areas that plans to consolidate all processes related to PAN card issuance and data correction. Along with it, major services related to TAN will also be added with this project. TAN (Tax Deduction and Collection Account Number) is mandatory for any company, firm, or individual, who deducts or collects tax at source, on behalf of the Income Tax Department.

Simplified Process: Presently, the PAN related services are hosted on three different portals (e-Filing Portal, UTIITSL Portal and Protean e-Gov Portal). In the PAN 2.0 Project, all PAN/TAN related services will be hosted on a single unified portal – this will make the entire process quite simplified, convenient and easy for the individuals.
Paperless Documentation: The entire PAN 2.0 process – from application to issuance will become paperless through comprehensive use of technology. This will ensure faster service and entire process going online digitally.
AI-Enabled Intervention: Going by the latest trends, AI (Artificial Intelligence) features will be put to use in the PAN 2.0 system. It will help identify duplicate PANs, fraudulent applications or suspicious financial records to build more integrity.
Real-Time Updates: With the new portal by ITD, user will be able to check the status of their existing PAN applications, any corrections to be done, or changes in real-time through a developed digital interface by the government.
System Integration: The revised system will have major portals linked to each other, such as PAN with Aadhaar, the Goods and Services Tax Network (GSTN), banking systems to have anytime access and one-stop verification possible.
Unique QR code: The QR code shall help in validating the PAN and its details, history of transactions and the bank account information for access to entire database with minimal processing and hassle. This will also add an extra layer of security to keep information safe. Personal information breach will be avoided as the details will be saved in an encrypted mode within the QR code.
KYC Platform: PAN 2.0 will serve as a centralized KYC (Know Your Customer) portal for multiple financial platforms – which will make account linking, verification and additional financial services possible at one platform.

Important Guidelines:

The existing PAN card holders are not required to apply for new PAN under the upgraded system (PAN 2.0). The existing valid PAN cards will continue to be valid under PAN 2.0.
Once the PAN 2.0 project gets rolled out, cardholders can make changes or corrections to their existing PAN details through the portal itself and that too free of cost.
Until the PAN 2.0 comes into activation, the PAN holders can avail the Aadhaar based online facility for any kind of changes to be made via below links:

PAN holders having an old card without the QR code have an option to apply for a new one either in the existing eco-system or when the new system gets rolled out.
For business owners and their firms – it will now be possible to register and link PAN details more carefully, which will reduce the processing time and make things more streamlined as per the government laws.

Eligibility for PAN 2.0

Existing PAN card holders will be automatically eligible for the PAN 2.0 upgrade.
New applicants must fulfil the eligibility requirement by submitting the Proof of Identity, Proof of Address ad Proof of Birth in the fresh application.

The PAN 2.0 card is an enhanced and upgraded version of the traditional PAN card, which was given as a physical one to entities and individuals. With a tighter security plan in place, this paperless and digital card will put India on the global map at a higher position and take the economy a step ahead. Though, the Income Tax Department has not yet specified timeline for the complete rollout of PAN 2.0, it is expected to be launched soon going by the current extensive focus on digitization and technology developments. This big scale task comes at a crucial time, to keep the financial ecosystem transparent and secure. It will play a pivotal role in shaping the digital landscape of the country, serve as a significant stepping stone to modernize India’s tax system and align with the Government’s Digital India vision for elevated data protection.