NPCI introduces real time PAN-Bank Account linking on income tax website; taxpayers may get faster income tax refunds
Jun 20, 2025
Synopsis
NPCI has launched a new PAN and Bank Account Validation API for government departments, enabling real-time verification of taxpayer details directly from banks' Core Banking Systems. This initiative aims to streamline income tax refunds and direct benefit transfers by ensuring faster, error-free processing and reducing fraud risks. Banks are advised to prioritize implementation for the Government of India.
The National Payments Corporation of India (NPCI) has launched a new facility regarding PAN and Bank Account validation on the income tax e-filing website. The new facility will help taxpayers in quick validation on their PAN-Bank account linking on the income tax e-filing website. “The main goal of this is simplifying real-time verification of PAN details, bank account status, and account holder identities straight from banks' Core Banking Systems (CBS),” the NPCI circular stated. The new facility was announced in a circular dated June 17, 2025.
What NPCI circular said on PAN-Bank Account linking?
As a continuation of that initiative, NPCI has now introduced a new PAN and Bank Account Validation API designed specifically for Government departments. This API will facilitate real-time verification of PAN details, Bank account status and accountholder name directly from the bank's Core Banking System (CBS).
Utkarsh Bhatnagar, Partner, Cyril Amarchand Mangaldas, says, “This will enable quicker and real time validation of PAN and bank account details of taxpayers accessing the Income Tax website.”
According to the NPCI circular on June 17, 2025, "This API will be used by Government departments to verify the customer account details like PAN validation/Account Status Validation/Account holder name validation from their bank CBS. As this is a service provided to the Government of India all the Member Banks are advised to take necessary steps for implementation on priority."
How will the new facility help in faster income tax refunds?
Bhatnagar says, “The new facility will enable faster and error-free processing of income tax refunds and direct benefit transfers by instantly verifying details, slashing delays and reducing fraud risks.”
Banks will have to upgrade their systems to comply with NPCI’s secure API standards, which could involve significant operational changes. While taxpayers will benefit from faster, error-free refund processing, the transition may pose challenges like system upgrades and potential cybersecurity risks.
This initiative aligns with NPCI’s broader mission to strengthen India’s digital payment ecosystem, promising greater efficiency but requiring robust collaboration among stakeholders.
[The Economic Times]
