Union Budget 2023: KYC norms to be simplified, PAN to become common identifier

IANS

New Delhi, February 1

For investors to reclaim unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority with ease, an integrated IT portal is proposed to be established, Finance Minister Nirmala Sitharaman announced in Union Budget 2023-24 on Wednesday.

In addition, the KYC process will be simplified by adopting a ‘risk-based’ instead of ‘one size fits all’ approach. The financial sector regulators will also be encouraged to have a KYC system fully amenable to meet the needs of Digital India.

A one-stop solution for reconciliation and updating of identity and address of individuals maintained by various government agencies, regulators and regulated entities will be established using DigiLocker service and Aadhaar as foundational identity, Sitharaman said.

For the business establishments required to have a Permanent Account Number (PAN), the PAN will be used as the common identifier for all digital systems of specified government agencies. This will bring ease of doing business; and it will be facilitated through a legal mandate.

For obviating the need for separate submission of same information to different government agencies, a system of ‘Unified Filing Process’ will be set-up. Such filing of information or return in simplified forms on a common portal, will be shared with other agencies as per filer’s choice.

Abhishek Dev, CEO and Co-Founder, Epsilon Money Mart said simplifying of KYC, using PAN as common business identifier and enhanced use of Digi locker are all welcome steps towards important objectives of simplification of investment, taxation and better enhanced financial inclusion of individuals and businesses.

Milan Ganatra, CEO & Founder, 1SilverBullet said making a PAN, a unified document will take a long way. Secondly, introducing a digital locker for non-individuals is an extremely major step, allowing non-individuals to go fully digital which was a big challenge, i.e., from opening a bank account to corporate transacting no longer will be a hindrance.