PAN 2.0: The Modi government has approved a new PAN 2.0 project and the first question that comes to the mind of taxpayers is, should they apply for the upgraded PAN Card under PAN 2.0? A free application option for a new PAN will be available for those needing to correct or update their details, such as name or date of birth.
It’s important to note that the Income Tax Department has issued a statement confirming that current PAN cardholders need not mandatorily obtain a new PAN under the PAN 2.0 initiative.
Should you replace old PAN with new PAN Card under PAN 2.0?
Experts are of the view that individuals holding older white PAN cards or PAN cards without QR codes should obtain the newer version featuring a QR code. Experts believe that the updated PAN card design with PAN 2.0 will reduce fraud risks through its integrated QR code whilst enabling quick verification.
What are the benefits of PAN Card with QR Code?
Vikram Babbar, Partner, EY Forensic & Integrity Services – Financial Services told ET, “Upgrading to the new PAN card design with a QR code is a proactive step for users to safeguard their identity and financial information. It helps reduce the likelihood of falling prey to fraudulent activities.”
Supporting this perspective, Ankit Ratan, CEO & Co-founder, Signzy – an online identity verification and customer onboarding company told ET, “Under the PAN 2.0 initiative, the entire process of PAN application has been digitized. This enables provision of seamless PAN authentication and validation services to various organisations, including financial institutions, banks, and governmental bodies at both central and state levels.”
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According to Babbar, the QR code integration with PAN Card offers several advantages to taxpayers:
- Strengthened Security Features: The incorporation of QR code technology in the new PAN card significantly reduces vulnerability to duplication or alteration. The encrypted personal information within the QR code is accessible solely to authorised personnel with specific software. This security measure prevents fraudsters from modifying names and photographs whilst retaining the original PAN number. Financial institutions can utilise the QR code to authenticate the printed information.
- Efficient Authentication Process: Identity verification becomes streamlined through the QR code scanning feature on the updated PAN card. The immediate verification process serves as protection against identity theft and impersonation. This functionality proves particularly valuable during financial transactions by reducing errors and fraudulent activities.
- Current Information Maintenance: The upgraded PAN card ensures user details conform to the Income Tax Department’s latest formatting requirements.
- Regulatory Adherence: Users who obtain the redesigned PAN card align with the government’s updated identification protocols, supporting a more secure financial system.
- Fraud Prevention: The technical complexity involved in accurately reproducing QR codes creates a significant barrier for fraudsters attempting to duplicate PAN cards.
Ratan from Signzy, Ratan, explains that the new PAN card design incorporating a QR code represents a crucial advancement in fraud prevention and regulatory adherence. The QR code technology provides enhanced security and verification capabilities by storing encrypted information about the cardholder. The sophisticated encryption makes PAN card replication virtually impossible, as the QR code verification requires authorised software, confirming the card’s authenticity and proper ownership, he says.
A contrasting perspective comes from Sandeep Jhunjhunwala of Nangia Andersen LLP, who notes, “Printed PAN cards carry QR code on them, now as well. Hence, while an upgrade to a new PAN card could be done anytime, it may not necessarily mean that under PAN 2.0 project, this would always protect the taxpayer against any potential fraud. The new system is expected to include features such as mandatory Aadhaar linkage, real-time validation and advanced data analytics, all of which could potentially help in identifying and preventing frauds. However, it remains unclear now as to how effectively these features would address the potential of fraud. As PAN 2.0 evolves, stakeholders could watch out for further updates from the authorities to understand how these features would be implemented and whether additional measures would be introduced to specifically tackle the menace of financial frauds.”