NPCI Introduces Service for PAN and Bank Account Verification on Income Tax e-filing Portal

The National Payments Corporation of India (NPCI) has rolled out a facility to accelerate stakeholder validation regarding the taxpayer’s PAN and bank account linking on the income tax e-filing portal. The NPCI circular dated June 17, 2025, mentions that this initiative aims to simplify real-time verification of PAN details, bank account status, and account holder identities directly from banks’ Core Banking Systems (CBS)

As a continuation of this initiative, NPCI has launched a PAN and Bank Account Validation API specifically for Government departments. The API works as a Secure online gateway between the internal systems of the bank and the government tax platforms, which helps effortless communication and data exchange. When a user begins PAN Validation or links the bank account on the income tax portal, the API sends a request to the relevant bank’s CBS in order to verify the PAN details, Account Holder’s Name, Account Status, whether the account is active, inactive or closed. The circular clearly stated that all member banks should implement this on a priority basis since the service is provided to the Government of India.

This introduction of the API will result in providing several benefits to the taxpayers, which include

• Quick and easy linking of the Pan and Bank Account
• Decrease in Manual Errors
• Faster refunds of Tax
• Secure Data and Trusted Systems

Moreover, the NPCI Circular stated that, “As this is a service provided to the Government of India, all the Member Banks are advised to take necessary steps for implementation on priority.”

Banks are going to have to upgrade their systems to meet secure API standards of NPCI, which could lead to major operational changes. While taxpayers will benefit from smoother refund processing, the implementation phase may come with challenges like system upgrades and cybersecurity concerns.

Therefore, as the NPCI brings these initiatives, the taxpayers will get more efficient and secure interaction with the income tax e-filing system. This upgrade will result in an important step in transforming the financial infrastructure of India to enable future innovations.