The PAN 2.0 Project — What is it?

This document covers

1. Background
2. The PAN 2.0 Project — What is it?
3. Goals of PAN 2.0
4. Timeline for PAN 2.0
5. Impact on existing PAN Cards?
6. What is expected in getting the new PAN Issuance?
7. Who would be custodian of Data?
8. Does this include both TAN and PAN?
9. Will the current process of PAN Issuance continue?

1. Background

Income Tax Department issues ten-digit unique alphanumeric PANs.

PAN was introduced to facilitate linking of various documents, including tax payments, assessments, tax demands, tax arrears, etc., to facilitate easy retrieval of information and matching of taxpayers' investment, loan, and other business activities collected from internal and external sources to detect and combat tax evasion and widen the tax base.

New Income Tax Department 10-digit alphanumeric Permanent Account Number (PAN) deployment is planned. The new implementation will include a QR code on all new and old cards, an online application process, the merger of all identification numbers to create the PAN as the business identifier, and a data vault for data protection and cybersecurity.

2. The PAN 2.0 Project — What is it?

The Union Cabinet gave its approval to the Income Tax Department's PAN 2.0 Project on Monday, November 25, 2024. The project has a budget of Rs 1,435 crore. Union Minister of Information and Broadcasting Ashwini Vaishnaw revealed the project's scope during Monday's Cabinet briefing.

It will involve modernizing the existing PAN system, reworking the IT infrastructure, and establishing PAN as a universal business identifier for certain government agencies' digital systems.

3. Goals of PAN 2.0

• Create a unified mechanism for the issuance of PAN cards to Indian residents.
• A PAN data vault system that is mandatory in order to preserve a solitary source of truth
• Protection of confidential information
• Preventing cyberattacks
• Framework for Organizations to obtain PAN information from the data vault (secured infrastructure).
• In contrast to the current paper application procedure for PAN/TAN, the process is 100% online.

4. Timeline for PAN 2.0

Although the timeline has not yet been disclosed, it is anticipated that the project will be completed within 24 months due to the significance of the project and the incorporation of additional taxpayers in the tax network.

5. Impact on existing PAN Cards?

There are approximately 78 crore PAN cards that have been issued thus far, with 98% of them being issued to individuals. It is anticipated that all taxpayers will be able to seamlessly transition to the new system at no cost.

6. What is expected in getting the new PAN Issuance?

The current process of applying for a PAN card through NSDL or UTIITSL is somewhat cumbersome. The taxpayer must first register for a PAN/TAN on the NSDL or UTIITSL website, print and sign the documents, and then post them to NSDL or UTIITSL. The PAN/TAN will typically be obtained from the Income Tax Department within 10-20 days.

In contrast, PAN 2.0 will provide taxpayers with relief from the earlier procedure and will digitize the entire process. The PAN/TAN application procedure will be entirely paperless. The applicant has the option to submit an online application and obtain their PAN within 10 minutes, without the need to deal with paper work.

The PAN 2.0 initiative is in alignment with the government's vision of a digital India.

7. Who would serve as the data custodian for PAN 2.0?

The Income Tax Department in the Department of Finance is the data custodian for the extant PAN 1.0 data, and it is anticipated that this will remain the case for PAN 2.0 data.

However, the existing PAN 1.0 data is maintained in a variety of databases, including those of financial institutions, banks, and NBFCs, for a variety of purposes.

In the future, it is anticipated that a validation mechanism will be implemented in lieu of retaining the entirety of the information. This is somewhat comparable to Aadhaar.

8. Does this include both TAN and PAN?

Yes, Both PAN and TAN are included in PAN 2.0 initiative.

9. Will the current process of PAN Issuance continue?

• Yes, the current process of PAN issuance would continue until the PAN 2.0 rollout
• Today, one can get the PAN number through Protean Tech organisation (formerly NSDL e-Governance infrastructure Limited) and UTIITSL (UTI infrastructure Technology and Services Limited)
• Also the taxpayers can get the Instant PAN in 10 min through Income Tax portal.