PAN to be used as common identifier
PAN is a Permanent Account Number issued by the Income Tax Department of India. It is a ten-digit alphanumeric number. During the Union Budget 2023, Finance Minister Smt Nirmala Sitaraman announced that GoI is to use PAN as a universal identifier for all digital systems. This applies only to specific government entities as appointed. This will increase the ease of doing business.
The initiative is being launched to increase the PAN user base and also to simplify access to systems working under government entities. This new PAN as an identity for digital systems will help in the following way:
- To reduce duplicity in information
- To reduce the compliance burden
- Reduce the gestation periods of projects
- Promote ease of doing business and also increase the ease of starting a business
- With PAN becoming a common identifier, the multiple requirements of KYC will be reduced
Why are the changes being made?
The income tax department uses the PAN card to track financial transactions in the country. Tax liabilities of an individual and a company are assessed using PAN cards. PAN helps GoI reduce tax evasions. PAN is compulsory for the sale or purchase of vehicles, opening an account, cash payment and transactions of more than Rs 50,000, the purchase of securities, the sale or purchase of properties, and lots more. By making PAN compulsory, the tax norms are being made stricter.
Category: Economy & Banking Current Affairs - 2022