The finance minister Nirmala Sitharaman proposed using PAN cards as a universal identity for all digital systems at government agencies when delivering the final comprehensive budget of the current government. The change is expected to simplify the KYC procedure and make it easier for the Income Tax Department and other government organizations to maintain the PAN cardholders' documentation.
“Instead of using a one-size-fits-all approach, the KYC process will be simplified by using a risk-based strategy. The regulators of the financial sector will be pushed to create a KYC system that is compatible with the needs of a digital India,” Sitharaman said.
Pankaj Mathpal, MD & CEO at Optima Money Managers, commented on the benefits of this budget 2023 plan. "The budget proposal on PAN card to be used as a uniform identity for all digital systems at government agencies is likely to ease the KYC process," he said.
Jitendra Solanki, a tax and investment specialist registered with SEB, explained the benefit of this budget 2023 proposal, saying, "The idea is going to make it easier for the Income Tax Department and other government organizations 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 solution that is made accessible 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 organizations would allow income taxpayers to update their KYC and income tax documents by simply updating the digital locker where they have saved their PAN cards.
When this idea is implemented, a PAN cardholder would no longer need to visit multiple windows to update their KYC, such as income tax offices, banks, etc. Instead, they will be able to update their KYC in their digital locker, which is where their PAN card is kept.
