Nirmala Sitharaman’s proposal for PAN card holders is included in the Union Budget 2023.
The adoption of PAN cards as a universal identity for all digital systems at government institutions was suggested by Finance Minister Nirmala Sitharaman when delivering the final comprehensive budget of the current federal government. With this change, the Income Tax Department and other governmental organisations should have an easier time managing PAN cardholders’ documentation and the KYC process as a whole.
The initiative to make PAN a universal identity for all digital systems at government institutions, if employed successfully, can be a game changer for digital services, according to Shilpa Mankar Ahluwalia, Partner, Shardul Amarchand Mangaldas & Co. It can accomplish for corporations what Aadhaar did for people. PAN has the ability to improve access to public goods (including licences and registrations), streamline KYC procedures, and make doing business simpler.
It can serve as a lone source of information for distribution of private commodities like financial services as well as for regulators. Data related to PAN may be analysed to evaluate eligibility for loans, investments, insurance, and other financial products, thereby enhancing, for instance, the availability of credit to SME and MSME enterprises. Additionally, by facilitating the creation of a centralized KYC database, this action will enable banks and other financial institutions to enrol smaller businesses at much cheaper KYC costs.
Pankaj Mathpal, MD & CEO at Optima Money Managers, commented on the advantages of this budget 2023 proposal. “The budget proposal on PAN card to be used as a uniform identity for all digital system at government institutions is expected to ease the KYC process,” he said.”
Jitendra Solanki, a tax and investment specialist registered with SEB, explained the advantage of this budget 2023 proposal, saying, “The proposal is going to make it simple for the Income Tax Department and other government organisations to maintain a PAN cardholder’s document. A PAN cardholder will be able to update their KYC at the digital locker using the single window option that is made available there.”
Jitendra Solanki continued by stating that the proposal in the budget for 2023 to use PAN cards as a common identifier for all digital systems at government organisations would allow income tax payers to update their KYC and income tax documents by simply updating the digital locker where they have stored their PAN cards.
Expecting this proposal to increase financial inclusion Deputy Country Manager for Tide India, Kumar Shekhar, stated, “The move is anticipated to improve financial inclusion for consumers and company owners in addition to streamlining the KYC procedure. It’s a win-win solution with a one-size-fits-all strategy with the goal of creating a Digital India.”