Existing PAN cards will continue to be valid under PAN 2.0, as per the FAQs issued by the Finance Ministry on Tuesday. Existing PAN holders need not mandatorily apply for the new card but could upgrade their PAN free of cost. The number or PAN would remain the same. The allotment or update or correction of PAN will be done free of cost and e-PAN will be sent to the registered email ID. For a physical PAN card, the applicant has to make a request along with a fee of Rs 50 (domestic). For delivery of cards outside India, Rs 15 plus postal charges will be charged, the FAQs said.

What is the PAN 2.0 Project?

PAN enables the I-T Department to link transactions such as tax payments, Tax Deducted at Source (TDS)/Tax Collected at Source (TCS) credits and income returns with the department. Essentially, PAN acts as an identifier for the person with the tax department and remains the same once allotted.

Further, TAN stands for Tax Deduction and Collection Account Number, a 10-digit alphanumeric number issued by the I-T Department. TAN has to be obtained by people responsible for deducting or collecting tax at source. It is compulsory to quote TAN in TDS/TCS return, any TDS/TCS payment challan and TDS/TCS certificates.

The PAN 2.0 Project, with a financial implication of Rs 1,435 crore, was approved by the Union Cabinet on Monday. Under it, the existing PAN system will be upgraded and its IT backbone will be revamped, Union Information and Broadcasting Minister Ashwini Vaishnaw said during the Cabinet briefing.

“There were repeated demands from the industry to have a common business identifier. They used to say they don’t want different (identification) numbers, 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,” he said.

Currently, PAN-related services are spread across three platforms: the e-filing portal, the UTIITSL portal, and the Protean e-Gov portal. These services will now be integrated into a single, unified portal. “This one-stop platform will handle comprehensively issues/matters related to PAN and TAN… By doing so, the I-T Department endeavours to simplify processes, eliminate delays, and improve grievance redressal mechanisms,” the FAQs said.

What are the features of PAN 2.0?

The QR code feature, which began in 2017-18, helps validate the PAN. This feature will continue with some enhancements.

The project also aims to set up a “mandatory PAN data vault system” for all entities using PAN data, including financial institutions, government agencies, and central and state government departments through an online validation service. “The PAN related information is used by many entities such as banks, insurance companies… So, those (entities) who take details of PAN, they will have to keep PAN data safely, mandatorily through the data vault system,” Vaishnaw said.

An official statement said the project will enable a technology-driven transformation of taxpayer registration services to improve ease of access and service delivery.

What does it mean for individuals and businesses?

Of the 78 crore PAN cards issued, 98 per cent belong to individuals. A senior Finance Ministry official told The Indian Express that “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 (paperless).” Also, PAN 2.0 will help weed out duplicate PANs and minimise instances of one person holding more than one PAN, the Ministry said.

For businesses, this would mean a seamless, common system for filing various tax challans and returns. “In the PAN 2.0 Project, all PAN/TAN related services will be hosted on a single unified portal of ITD. The said Portal would host all end-to-end services related to PAN and TAN like allotment, updation, correction, Online PAN Validation (OPV), know your AO, AADHAAR-PAN linking, verify your PAN, request for e-PAN, request for reprint of PAN card etc.,” the FAQs said.