The Union government has approved a Rs 1,435 crore plan – christened PAN 2.0 – to upgrade the Permanent Account Number (PAN) system and make it a common business identifier for all digital systems used by government agencies.

The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi approved the project on Monday.

The move aims to overhaul the PAN ecosystem and to ensure smoother services for taxpayers, the government said.

The new system will incorporate QR codes into all PAN cards, new and old, and will establish a mandatory “data vault” for improved cyber and data security. A paperless online portal will also be introduced for grievance redressal.

Existing PAN holders, of whom there are approximately 78 crore in India, will be able to upgrade their cards free of cost once the scheme is rolled out. Citizens’ Permanent Account Numbers will remain the same.

Information and Broadcasting Minister Ashwini Vaishnaw on Monday said that the project addresses long-standing demands from the business community for a single identification number, reported The Indian Express.

“The initiative consolidates PAN, TAN (Tax Deduction and Collection Account Number) and TIN (Taxpayer Identification Number) under one system, reducing redundancy,” he said.

The new system would also ensure secure storage of PAN data by banks and insurance companies. “Entities handling PAN data will be required to store it safely via the data vault,” Vaishnaw added.

Currently, PAN serves as a key identifier for income tax transactions, including tax payments and Tax Deducted at Source and Tax Collected at Source credits. Under PAN 2.0, it will also unify these processes for businesses, which would in turn ease tax filings.