PAN 2.0: Why Upgrading to a QR-Code PAN Card is a Smart Move, All You Need To Know

With the introduction of PAN 2.0, many taxpayers are contemplating whether they should get their PAN cards upgraded or not. The upgraded PAN card will come with a QR code printed on it, enabling the feasibility of verification and increased security. However, it is important to note that the Income Tax Department released a statement clarifying that it is not a compulsion for existing PAN card holders to issue a new PAN card under the PAN 2.0 initiative.

Ankit Ratan, CEO & Co-founder, Signzy – an online identity verification and customer onboarding company said, "Under the PAN 2.0 initiative, the entire process of PAN application has been digitized. This enables provision of seamless PAN authentication and validation services to various organisations, including financial institutions, banks, and governmental bodies at both central and state levels," citing ET.

Renovating the same perspective, Vikram Babbar, Partner, EY Forensic & Integrity Services – Financial Services told ET "Upgrading to the new PAN card design with a QR code is a proactive step for users to safeguard their identity and financial information. It helps reduce the likelihood of falling prey to fraudulent activities."

As per Babbar, the upgraded PAN card comes with many features such as,

1. Streamlined Authentication Method: The QR code scanning feature on the revised PAN card simplifies the identity verification process, safeguarding against identity theft and impersonation. This feature minimizes mistakes and fraudulent actions while undertaking financial transactions.
2. Updated Information Management: The enhanced PAN card guarantees that user information aligns with the latest formatting standards set by the Income Tax Department.
3. Enhanced Security Measures: The use of QR code technology in the updated PAN card greatly decreases the risk of duplication or modification. The personal information encoded in the QR code can only be accessed by authorized individuals using designated software. This security feature stops fraudsters from altering names and images while keeping the original PAN number intact. Financial institutions can use the QR code to verify the printed details.
4. Regulatory Compliance: Individuals who acquire the revamped PAN card adhere to the government’s revised identification standards, enhancing a safer financial framework.
5. Fraud Prevention: The intricate technical details of faithfully replicating QR codes pose a major obstacle for fraudsters trying to forge PAN cards.

Despite a huge unanimity, a differing perspective comes from Sandeep Jhunjhunwala of Nangia Andersen LLP, who told TOI, "Printed PAN cards carry QR code on them, now as well. Hence, while an upgrade to a new PAN card could be done anytime, it may not necessarily mean that under PAN 2.0 project, this would always protect the taxpayer against any potential fraud. The new system is expected to include features such as mandatory Aadhaar linkage, real-time validation and advanced data analytics, all of which could potentially help in identifying and preventing frauds. However, it remains unclear now as to how effectively these features would address the potential of fraud. As PAN 2.0 evolves, stakeholders could watch out for further updates from the authorities to understand how these features would be implemented and whether additional measures would be introduced to specifically tackle the menace of financial frauds."