The Government of India has introduced an upgraded version of the Permanent Account Number (PAN) system with the launch of ePAN, a digital version featuring a dynamic QR code. This initiative, announced by the Ministry of Finance on November 26, 2024, is aimed at simplifying identity verification and supporting the government’s digitization efforts. The new ePAN system is expected to reduce dependence on physical PAN cards, although challenges in widespread adoption remain.

The ePAN is part of the larger PAN 2.0 project, which has been allocated an investment of Rs 1,435 crore. It enables a paperless, no-cost process to obtain or update PANs, with ePANs being delivered to applicants’ registered email addresses. Individuals who still prefer physical PAN cards can request one for a nominal fee.

A key upgrade in this new system is the inclusion of a dynamic QR code, which experts believe could expand ePAN’s role beyond just tax identification. This feature may facilitate its use for KYC (Know Your Customer) and identity verification, areas where the previous version was limited. Legal and financial analysts suggest that if address details are incorporated into the QR code, ePAN could potentially replace supplementary documents like Aadhaar for specific transactions.

However, challenges remain for the adoption of ePAN. The regulatory framework and digital infrastructure must evolve to ensure its acceptance for electronic KYC purposes. Additionally, some institutions may still require physical PAN cards for verification, similar to the case with Aadhaar, where banks often ask for physical copies despite the availability of m-Aadhaar.

The launch of PAN 2.0 represents a significant step toward reducing paperwork and increasing convenience for users. However, its success will depend on institutional adoption and regulatory approval, with ePAN likely coexisting with physical PAN cards for the foreseeable future.