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The PAN 2.0 project requires existing PAN holders to upgrade their cards to comply with the changes and ensure proper usage.
A Permanent Account Number (PAN) card is a 10-digit unique alphanumeric number issued by the Income Tax Department to taxpayers.
It is used to track an individual's or entity's financial transactions and is required for many financial activities, including filing tax returns, opening bank accounts, and purchasing real estate.
The PAN card includes the individual's PAN number, name, date of birth, and photograph.
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The PAN system was rolled out in 1972, and became mandatory in 1976. The new PAN series was introduced in 1995, linking tax-related information to a unique identification number for better management and tracking of financial activities. |
First three characters: These are alphabetic characters in a sequence (AAA-ZZZ).
Fourth character: Represents the status of the cardholder.
Fifth character: This is the first letter of the last name (for individuals) or name of the organization.
Next four characters: These are a sequential number from 0001 to 9999.
Tenth character: This is an alphabetic check digit used for validation.
The Income Tax Department launched the PAN 2.0 Project to upgrade the existing Permanent Account Number (PAN) system.
It involves a redesign of the IT infrastructure, the addition of a QR code to all PAN cards, and the use of PAN as a common business identifier for digital systems across various government agencies.
The QR code on PAN cards will improve the integration of financial transactions with the tax department. It will make it easier to validate PAN details and improve transaction data accuracy.
The feature was introduced in 2017 and will be expanded in PAN 2.0.
Existing PAN card holders will have to upgrade to the new QR code-enabled cards. The upgrade will be free of charge. The new system will be fully online and paperless, making it easier for users to access and receive services.
As of now, it is voluntary for citizens to apply for an update of PAN cards to PAN 2.0.
It aims to protect PAN-related information by requiring banks and insurance companies to store PAN data securely. This system is designed to improve data security and cybersecurity.
The consolidation of Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), and Taxpayer Identification Number (TIN) into a single system to provide a unified business identifier.
For businesses, PAN 2.0 will provide a streamlined and uniform system for filing tax returns and challans. The use of PAN as a business identifier will simplify tax processes and improve compliance.
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PRACTICE QUESTION Q.Consider the following statements in the context of the PAN 2.0 initiative: 1. It will consolidate all Permanent Account Number services onto a single unified portal. 2. It is mandatory for citizens to apply for an update of PAN cards to PAN 2.0. Which of the above statements is/are correct? A) 1 only B) 2 only C) Both 1 and 2 D) Neither 1 nor 2 Answer: A Explanation: Statement 1 is correct: Currently, PAN services are delivered through three separate portals. The PAN 2.0 Project will consolidate all PAN/TAN services into a single, unified ITD portal. This centralised platform will offer a wide range of services, including allocation, updates, amendments, Online PAN Validation (OPV), Know your AO, AADHAAR-PAN linking, PAN verification, e-PAN requests, and PAN card reprint applications. Statement 2 is incorrect: Existing PAN cards issued to taxpayers remain valid. Taxpayers can upgrade their existing PAN cards to a new version that includes a QR code for added convenience and security. This upgrade is optional and involves at no extra cost. |
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