PAN 2.0: A master-key to access digital system and govt services, know how it will help you
Dec 12, 2024
Synopsis
PAN2.0: The common identifier number which is going to be PAN 2.0 has many benefits. Gaurav Makhijani from Roedl & Partner India, says: This project is expected to provide taxpayers a more seamless experience. By integrating data from various sources onto a single platform, the common identifier number will simplify the tracking of transactions/ investments that will provide better experience. This also means a reduction in overall cost of compliance handling, reduction in errors, etc."
When the government announced a new PAN project known as PAN 2.0, it made its intention clear about making PAN a common identifier number for various purposes. Think of it as the master key of the house which can unlock all the door-locks of the house.
Common identifier number was a long-term demand of the industry as in this age a person has many registrations-PAN, GSTIN, EPFO number, etc. and all of them have a different number. It is hard to keep track of all these numbers hence if technology permits a common identifier number is desired. Government has taken cognisance of this demand and decided to make PAN 2.0 a common identifier number.
Read below to find out how PAN 2.0's common identifier number can make compliances easier to follow, track and also bring down your overall cost of operations.
PAN 2.0 will become the common identifier number
Chartered Accountant Anand Bathiya, President, Bombay Chartered Accountants' Society, says that the key aspect of the PAN 2.0 project is the upgraded technology which will enable it to be used as a common identifier for businesses. "Today a business entity has many registrations, e.g. PAN, TAN, TIN, GSTIN, CIN, EPFO number, etc. a combined common identifier powered by technology would add to the ease of running a business in India," he says.
How a common identifier number can help you
ET Wealth Online has asked various experts about how the common identifier number feature of PAN 2.0 may improve the services availed by taxpayers. Here's a summary of what they said:
PAN 2.0's common identifier number feature can help quicker processing of refunds, approvals etc in GST
Akhil Chandna, Partner, Grant Thornton Bharat says: PAN will become a universal identifier which will minimize the need to maintain and remember multiple IDs for various services. Taxpayers and Businesses will get benefitted as PAN will play the role of a key identifier in GST filings, corporate registrations, and various income tax services. For businesses, it simplifies operations by eliminating the need for multiple identifiers such as Tax Deduction and Collection Account Number (TAN). With integration of PAN with systems like Aadhaar and GSTN, taxpayers will be able to get quicker processing of refunds, approvals, filings etc.
The common identifier system can save from repeated submission of same documents across multiple portals
Kinjal Bhuta, Secretary, BCAS says: "Using the PAN 2.0, common information and documents can be auto fetched across the systems. This integrated system at the central and state level departments will provide relief to business users from repeated submissions of same documents common across multiple services, entailing quicker processing with security."
S. Vasudevan, Executive Partner, Lakshmikumaran & Sridharan (LKS), says, In order to simplify access for users, the PAN 2.0 project seeks to integrate all PAN/TAN related services onto one single unified portal of the Income Tax Department as opposed to the current services being hosted on three different portals (e-Filing Portal, UTIITSL Portal and Protean e-Gov Portal). Furthermore, the PAN 2.0 project adopts global standards and ensures compliance with key ISO certifications for quality, security, and service management (e.g., ISO 27001, ISO 9001). The project also ensures protection of personal and demographic data through enhanced security measures, including a PAN Data Vault."
The common identifier number feature of PAN 2.0 can reduce compliance cost
Gaurav Makhijani, Associate Partner (Head of Tax for North India and Gujarat) at Roedl & Partner India, says: This project is expected to provide taxpayers a more seamless experience. By integrating data from various sources onto a single platform, the common identifier number will simplify the tracking of transactions/ investments that will provide better experience. This also means a reduction in overall cost of compliance handling, reduction in errors, etc. Thus, it aids in making tax and regulatory compliance easy.
PAN 2.0 may help in taxpayer's verification and thus reduce the lead time for obtaining approvals
According to Chandna from Grant Thornton Bharat, "PAN 2.0 will be the central identifier for individuals and entities, enabling authorities to access accurate and consistent information across various platforms. This is expected to help in tasks like taxpayer verification, tracking financial transactions, and compliance monitoring."
Chandna further explains that this common identifier will link various systems of government agencies like Goods and Services Tax Network (GSTN), Ministry of Corporate Affairs (MCA), and Income Tax departments.
Bhuta from BCAS, says, there are a lot of verifications which businesses have to do on a regular basis for obtaining loans, bidding for tenders, for compliances with various laws, application for obtaining various licenses etc.
"If the Common Identifier number is implemented, then it shall automate KYCs required at multiple places. It shall also enable faster processing of compliance related functions of a business and may reduce the lead time in obtaining approvals drastically," she says.
"By providing a single platform for all PAN/TAN related services as well as the adoption of ecofriendly paperless processes, PAN 2.0 enhances convenience for taxpayers. Furthermore, the online paperless procedure may decrease processing time. Additionally, the robust security measures may also have the effect of augmenting the user experience," says Vasudevan.
PAN 2.0 may enable updation of details seamlessly across various government departments
According to Bhuta, If a business changes any important particulars like name, registered address, nature of business, type of business structure etc., there are multiple places where the same information has to be updated and changed like Income Tax Authorities, Changing PAN and TAN, changing in GST records, changing in MCA records, etc. "Common Identifier number could help in enabling the change at all places by just updating with one interface. Also, it shall reduce duplication of entries thereby bringing legitimacy to the business eco-system," she says.
Makhijani however sounds a cautionary alarm about consequences of the common identifier system if not implemented properly. He says, "While the advantages for both businesses and government authorities are evident, it will be essential for the authority to approach this development with due preparation and testing."
Makhijani cautions that if the system becomes inter-linked and PAN 2.0 becomes the common identifier then a scenario may happen where a wrong data entry in PAN 2.0 gets replicated across multiple systems.
"These are different law with some different treatment – tracking of transaction and using the value as it might lead to challenges. If the automatic processing under any regulation is planned using the data generated via PAN – its impact must be checked and tested before automation is applied to that extent. There is also a possibility that error is made at the time of data entry using PAN. In this case, information with all the department may get distorted picture of transaction. Therefore, business must ensure entry using PAN is made carefully. Government should also consider looking at this problem and provide probable back-end resolution options in case data entry is incorrect and other transacting party (responsible for data entry using PAN) is not assisting in correct the data entry. The extent to which the government utilizes the common identifier and addresses practical challenges will be critical to its success," says Makhijani from Roedl & Partner India.
[The Economic Times]
