PAN 2.0 Project

 

What PAN 2.0 means for taxpayers

The 10-digit alphanumeric Permanent Account Number (PAN), issued by the Income Tax Department, is set for an upgrade under the PAN 2.0 Project.

What is the PAN 2.0 Project?

The Pan 2.0 Project of the income tax department, with a financial implication of Rs 1435 crore, was approved by the Union Cabinet on Monday. Under the project, the existing Permanent Account Number (PAN) system will be upgraded completely, the IT backbone will be revamped and PAN will be made a common business identifier for all digital systems of specified government agencies, making it the “single source of truth and data consistency.

There were repeated demands from the industry to have a common business identifier. They don’t want different (identification) number, a single number would be beneficial. The project will make efforts to make PAN as the common business identifier. All PAN / TAN / TIN will be clubbed under this system.

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, Aadhaar.

 

How PAN and TAN work currently

A 10-digit alphanumeric number, PAN enables the income tax department to link all transactions of a person with the department. These transactions include tax payments, Tax Deducted at Source (TDS) / Tax Collected at Source (TCS) credits, returns of income, specified transactions. PAN, thus, acts as an identifier for the person with the tax department. Once PAN is allotted, it remains the same forever. It is mandatory to quote PAN on filling of income tax return.

TAN stands for Tax Deduction and Collection Account Number, which is a 10-digit alphanumeric number issued by the income tax department. TAN needs to be obtained by all persons responsible for deduction or collection tax at source. It is compulsory to quote TAN in TDS/TCS returns, any TDS/TCS payment challan, as well as on TDS/TCS certificates.

QR code in all cards

A QR code will be incorporated in all new and old cards. The QR-code feature 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.

Around 780 million PAN cards have been issued so far, out which 98% belong to individuals.

 

What PAN card holders nee to do

While existing PAN cards will continue to be valid, taxpayers with an old PAN card without QR code have an option to apply for anew card with QR code in existing PAN 2.0 once it is rolled out. The number or PAN will remain the same for existing users, but the card will need to be upgraded to incorporate the code. This will be free of cost for the users.

The existing PAN card holders can regenerate the old PAN card to the QR code-enabled ones. PAN holders having an old PAN card without QR code have an option to apply for a new card with QR code. In PAN 2.0, the submission of applications is going to be online.

 

New PAN date vault system

The PAN 2.0 project aims to set up a “mandatory PAN data vault system” for all entities using PAN data. This is being done for data protection and cybersecurity purposes. One of the most important features would be a PAN data vault system. The PAN related information is used by many entities such as banks, insurance companies. We give details of PAN at various places. So, those (entities) who take details of PAN, they will have to keep PAN data safely, mandatorily through the data vault system.

There will also be a unified portal for all PAN / TAN-related services. It’ll be completely paperless, online. A lot of focus will be on the grievance redressal system.

 

Benefits of revamped system

The PAN 2.0 project will enable technology-driven transformation of taxpayer registration services with an aim to improve ease of access and service delivery, an official statement. This will be an upgrade of the current PAN / TAN 1.0 ecosystem consolidating the core and non-core PAN / TAN activities as well as PAN validation service.

For businesses, this would mean a seamless, common system for filing various tax challans and returns as there will be a common identifier instead of the existing multiple ones. A unified portal will help businesses to file their tax challans and returns on one portal instead of existing multiple systems.

 

For More Details: Pooja Manoj Gupta, visit www.giia26.com

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