India PAN 2.0 Announced to Digitise PAN System, Enhance Security

India unveiled PAN 2.0 on 25 November, with ₹1,435 crore allocated to modernise the PAN/TAN system for enhanced efficiency. The upgraded PAN 2.0 system is designed to benefit people by enhancing the system’s digital infrastructure.

PAN Upgrade Features

The 10-digit alphanumeric Permanent Account Number (PAN), issued by the Income Tax Department, will be upgraded with a QR code on all new and existing cards, a fully online application process, consolidation of current identification numbers, and enhanced data protection through a new data vault system.

Upgrading to PAN 2.0

PAN cardholders will have the option to upgrade their cards. While the PAN number will remain unchanged, users must update their cards, with the government confirming that this upgrade will be provided at no cost to them.

However, the Income Tax Department has not yet provided details on the application process or timeline.

Difference Between PAN and TAN

The Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) are both 10-digit alphanumeric codes issued by the Income Tax Department, but they serve different purposes.

PAN is primarily used as a unique identifier for individuals, businesses, and entities to track their tax-related activities.It is mandatory for individuals to quote their PAN while filing their income tax returns.

On the other hand, TAN is specifically for entities responsible for deducting or collecting tax at source, such as employers or financial institutions. It is necessary for the submission of TDS/TCS returns, as well as for making related payments or issuing certificates.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.