New Delhi: The Government of India has upgraded the Permanent Account Number (PAN) system with the launch of a digital version, ePAN, featuring a dynamic QR code. This development aims to streamline identity verification processes and align with the government’s push toward digitization. The move is expected to reduce reliance on physical PAN cards, though challenges in widespread adoption remain.
Announced by the Ministry of Finance on November 26, 2024, this initiative is part of the broader PAN 2.0 project, which has received an investment of Rs 1,435 crore. The system allows for a paperless, cost-free process to obtain and update ePANs, which will be sent to applicants’ registered email addresses. Those preferring a physical PAN card can still request one for a nominal fee.
The introduction of a QR code is a significant upgrade, potentially enabling ePAN to serve as more than a tax identification tool. Experts suggest it could now be used for KYC (Know Your Customer) and identity verification, areas where the earlier version had limitations. Legal and financial analysts believe that if address details are integrated into the QR code, ePAN could eliminate the need for supplementary documents, such as Aadhaar, for certain transactions.
Despite these advancements, challenges persist. Regulatory frameworks and digital infrastructure must evolve for ePAN to be widely accepted for electronic KYC. Additionally, some institutions may continue to insist on physical PAN cards for verification, as seen with Aadhaar, where banks still require physical copies for some transactions despite the availability of digital alternatives like m-Aadhaar.
The transition to PAN 2.0 marks a step toward reducing paperwork and enhancing convenience for users. However, its success will depend on how effectively institutions adopt the upgraded system and the extent to which digital processes gain regulatory approval. For now, ePAN is a promising development, but its coexistence with physical PAN cards seems inevitable in the near term.
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