The National Payments Corporation of India (NPCI) has rolled out a new digital infrastructure to accelerate and streamline the verification of PAN and bank account details on the income tax e-filing portal. Announced on June 17, the new facility leverages Core Banking Systems (CBS) of banks to provide real-time authentication of Permanent Account Number (PAN), account status, and account holder identity.

This initiative is aimed at making the PAN-bank account validation process faster, more accurate, and less prone to manual errors, significantly improving the user experience for taxpayers. By ensuring swift and secure linkages between PAN and bank accounts, the system is expected to expedite tax refunds and reduce rejections or delays due to data mismatches.

In a parallel move, NPCI has introduced a specialized API for government departments, enabling them to directly verify key taxpayer details from banks’ CBS. The API will facilitate PAN validation, account status checks, and name verification, allowing government bodies to enhance the reliability of financial data for administrative functions such as processing direct benefit transfers and tax refunds.

“This API will be used by Government departments to verify customer account details like PAN validation, account status validation, and account holder name validation from their bank CBS,” the NPCI circular stated. It further directed all member banks to prioritize implementation, calling it a key service being extended to the Government of India.

For banks, the initiative will require upgrades to their systems to meet NPCI’s API security standards. While this shift may involve operational adjustments and a renewed focus on cybersecurity, the long-term benefits—such as reduced fraud, faster transaction processing, and improved trust in the tax ecosystem—are expected to outweigh the initial challenges.

Taxpayers stand to gain the most from the new validation system. Key advantages include quicker PAN-bank linking, faster refund disbursals, fewer manual errors during verification, and enhanced data security. The overall experience on the income tax e-filing platform is expected to become more efficient and user-friendly.

This step is part of NPCI’s larger mission to strengthen India’s digital payments infrastructure and support seamless interactions between citizens, banks, and government entities. As digital verification becomes the norm, the success of this rollout will depend on tight coordination between banks, government departments, and the NPCI.

The move marks a significant milestone in the modernization of India’s tax administration and digital governance, promising a future of faster, safer, and smarter financial services for millions of taxpayers.

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Mariya Paliwala

Mariya is the Senior Editor at Juris Hour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.

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