Cabinet approves PAN 2.0 Project; All Taxpayers need to Know

The Cabinet Committee on Economic Affairs (CCEA), led by Prime Minister Narendra Modi, has today approved the Income Tax Department‘s PAN 2.0 Project. According to the CCEA press release, the project will cost Rs 1,435 crore.

Union Information and Broadcasting Minister Ashwini Vaishnaw said that citizens will obtain a free QR Code upgrade for their PAN Card. “There will be a unified portal, completely paperless and online,” Vaishnaw added, emphasizing that the system will prioritise resolving complaints.

The implementation is consistent with the government’s Digital India goals since it establishes PAN as a single identity across certain government agencies’ digital platforms.

What is PAN 2.0 Project?

The PAN 2.0 plan of government intends to make the Permanent Account Number a common business identity across all digital platforms used by government organizations.

The Income Tax Department’s PAN 2.0 Project provides three important benefits through its technology-driven modernization of taxpayer registration services:

• Ease of access and rapid service delivery with higher quality;
• Benefits of using a single source of truth include consistent data, eco-friendly operations, and cost optimization.
• Security and infrastructure optimization for increased agility.

This e-Governance program seeks to improve taxpayer registration services by improving the digital experience through PAN/TAN service transformation.

It builds on the existing PAN/TAN 1.0 system by incorporating both core and non-core activities, as well as PAN validation services.

The Income Tax Department issues a laminated card with a ten-character alphanumeric identifier known as a Permanent Account Number (PAN). It is granted to any “person” upon application or is assigned immediately by the department without a formal request.

The Income Tax Department uses PAN to monitor and correlate all transactions involving an individual. This covers tax payments, TDS/TCS credits, income tax returns, specific transactions, and official communications. PAN serves as a unique identification that connects a “person” to the tax department.

The use of PAN has simplified the connection of numerous documents and activities, such as tax payments, assessments, demands, and arrears. It allows for quick information access and helps match details about investments, loans, and business operations acquired from multiple internal and external sources. This approach aids in detecting tax evasion while broadening the overall tax base.

Currently, roughly 78 crore PANs have been distributed, with people accounting for 98% of the total issuance.