PAN 2.0 Project- Aims, benefits & who should apply?

Key Aspects of the PAN 2.0 Project:

• Upgraded System: The project will enhance the existing permanent account number /TAN infrastructure, improving both core and non-core activities. It aims to introduce improved Permanent account number validation services and streamline the entire process.
• Universal Identifier: The Permanent account number card will become a universal identifier across various digital systems used by specific government agencies, expanding its role beyond taxation.
• Target Audience: Approximately 78 crore existing Permanent account number holders will be able to upgrade their PAN cards. While the PAN number remains the same, the card itself must be upgraded. Importantly, this upgrade will be free of cost for users.
• Investment: The government will invest Rs 1,435 crore in implementing the project.
• Launch Details: While the specifics of the application process and timeline have not yet been released, the project is expected to modernize the entire Permanent account number system, making it more efficient and secure.

Top 4 Benefits of PAN 2.0:

• Faster and Better Services: The upgrade promises quicker access and improved service quality for users.
• Accurate and Reliable Data: The new system will ensure consistent, reliable, and trustworthy data for both users and government agencies.
• Eco-Friendly: By reducing paperwork and automating processes, it is designed to be more sustainable and cost-effective.
• Enhanced Security: With upgraded infrastructure, the permanent account number system will offer greater security, reducing the risk of fraud and improving efficiency
• Around 78 crore current PAN users will need to upgrade their PAN cards under this initiative. The PAN number will remain unchanged, but the upgraded card will provide enhanced features and functionalities. The upgrade is free of cost.
• New Applicants: Individuals or businesses applying for PAN/TAN for the first time will benefit from the modernized system, ensuring faster and more efficient registration.

Consequences of Not Surrendering Duplicate PAN Card:

Possessing duplicate PAN cards is a violation of the Income Tax Act law, & it is essential to address this issue promptly to avoid penalties and complications. Income tax payers must ensure your valid PAN is updated across all financial institutions, including:

• • Bank accounts
  • Mutual funds
  • Stock trading accounts
  • Insurance policies
  • Tax filings
• If your PAN is linked with Aadhaar, this helps streamline records and reduces the chance of errors. Here’s what happens and the steps you should take:
  • Penalty Under Section 272B:  The Income Tax Department can impose a penalty of up to INR 10,000 for holding multiple PAN cards. This penalty is levied if the department discovers the duplicate PAN during compliance checks or audits. By taking these steps, you can avoid penalties and ensure seamless compliance with tax laws.
  • Tax Filing Complications: Duplicate PANs can lead to discrepancies in your tax filings, causing mismatches and potential notices from the tax department.
  • Risk of Misuse: Duplicate PAN cards increase the risk of identity theft or misuse for fraudulent activities, which may have legal consequences.

Steps to Surrender Duplicate PAN:

1. Verify the Valid PAN: Identify the PAN you want to retain and ensure it is linked to your Aadhaar and updated in all financial records (bank accounts, investments, etc.).
2. File Form for Surrender: Visit the NSDL or UTIITSL website and fill out the PAN Correction or Changes Form. Mention the duplicate PAN number and specify that it needs to be surrendered.
3. Attach Supporting Documents: Provide a copy of the PAN card you want to retain and the duplicate PAN card. Include your proof of identity, address, and Aadhaar card (for Aadhaar-linked PANs).
4. Submit the Application: Submit the form online or at a PAN service center. Pay the applicable fee, if any, for processing.
5. Acknowledge Surrender: Once processed, you will receive an acknowledgment confirming that the duplicate PAN has been surrendered.

TAN Allotment & Its Importance

TAN (Tax Deduction and Collection Account Number) is essential for entities responsible for Tax Deducted at Source or Tax Collected at Source. In certain cases, such as u/s 194-IA, where TDS is deducted for property transactions, PAN can be used instead of TAN. Here are the key points about Tax Deduction and Collection Account Number and its relevance:

1. TAN is a 10-character alphanumeric code, e.g., ABCDE1234F. Issued by the Income Tax Department.
2. Mandatory Usage: TAN is required for:
   • Filing TDS/TCS returns.
   • Making TDS/TCS payments to the government.
   • Issuing TDS/TCS certificates to deductees or collectees.
3. Penalty for Non-Compliance: Failure to apply for TAN, or not quoting it in TDS/TCS-related transactions, can lead to a penalty of ₹10,000 under Section 272BB.

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Legal Disclaimer:
The information / articles & any relies to the comments on this blog are provided purely for informational and educational purposes only & are purely based on my understanding / knowledge. They do noy constitute legal advice or legal opinions. The information / articles and any replies to the comments are intended but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as a legal advice or an indication of future results. Therefore, i can not take any responsibility for the results or consequences of any attempt to use or adopt any of the information presented on this blog. You are advised not to act or rely on any information / articles contained without first seeking the advice of a practicing professional.