Union Budget 2023: While presenting the last full budget of the current central government, Finance Minister Nirmala Sitharaman has proposed to use PAN card as as a common identifier for all digital system at government agencies. The move is expected to simplify KYC process and make it simple for the Income Tax Department and other government agencies to manage documents of the PAN cardholders.
On benefit of PAN card related proposals in budget 2023, Shilpa Mankar Ahluwalia, Partner, Shardul Amarchand Mangaldas & Co said, “The move to make PAN a universal identifier for all digital systems at government agencies, if utilized effectively, can be a game changer for digital services. For businesses, it can achieve what Aadhaar has done for individuals. PAN as the common identifier has the potential to simplify KYC processes, streamline access to public goods (including licenses and registrations) and make it easier to do business. It can also act as the single data point not just for regulators but also for distribution of private goods such as financial services. With adequate safeguards around data security and privacy, data linked to PAN could potentially be analysed to determine eligibility for credit, investment, insurance and other financial products, improving, for example, credit access for SME and MSME businesses. This move will also facilitate the building of a centralized KYC database that could significantly lower KYC costs for banks and other financial institutions when onboarding smaller businesses.”
Speaking on the benefit of this budget 2023 proposal, Pankaj Mathpal, MD & CEO at Optima Money Managers said, “The budget proposal on PAN card to be used at a common identifier for all digital system at government agencies is expected to simplify the KYC process.”
Explaining the benefit of this budget 2023 proposal, SEB registered tax and investment expert Jitendra Solanki said, “The proposal is going to make it simple for the Income Tax Department and other government agencies to manage a PAN cardholder’s document. A PAN cardholder would be able to update one’s KYC through single window opportunity being made available at the digital locker.”
Jitendra Solanki went on to add that budget 2023 proposal to use PAN card as as a common identifier for all digital system at government agencies would enable income tax payers to update their KYC and income tax documents by simply updating their digital locker where they have kept their PAN card.
Expecting boost to financial inclusion from this proposal Kumar Shekhar, Deputy Country Manager, Tide India said, “Other than simplifying the KYC process, the move is also expected to enhance financial inclusion for individuals and business owners. With a vision to make Digital India, it’s a win-win one-size-fits-all approach solution.”
PAN is a 10-digit alphanumeric number allotted by the income tax department to a person, firm or entity.