Finance Minister P Chidambaram has announced that soon biometric smart Permanent Account Number (PAN) cards may be issued to reduce chances of duplication and to ensure better tax compliance.

The biometric PAN card would use iris scan for identification. This means that you might now have to provide your fingerprint or iris / retina impression.

Currently, a PAN card costs about Rs 70. A biometric PAN card, however, will cost anything between Rs 200 and Rs 300.

It is compulsory to quote the PAN for many transactions, especially those specified by the Central Board of Direct Taxes. For example, transactions involving sale and purchase of property or a vehicle; payment in cash or by credit card exceeding Rs 25,000; getting a landline or cellular telephone connection; depositing amounts more than Rs 50,000 with a bank or a post office, buying mutual funds or stocks; et cetera.

With the importance of the PAN card rising slowly, it has become even more important to introduce more security measures to make information stored on the card safer than ever.

So what is biometrics and how does it keep information safe? Read on:

What is a smart card?

A smart card is a plastic device that has an integrated circuit or memory chip embedded in it, like those in a computer. The card connects to a smart card reader with direct contact or through remote radio frequency interface to authenticate information or identify a person.

What is biometrics?

Biometrics is the technique of recognising an individual based on physical or behavioural characteristics by comparing 'live' information or images with the records or patterns already stored in a computer in an encrypted form. The most common biometrics include fingerprints, retinal / iris scans, voice technology, facial or palm shape/size, signature, et cetera.

What this means is that specific information about your eyes or your fingerprints or your voice, etc can be stored on to the card. This information is unique to you and thus no one can misuse or duplicate it.

What are the benefits of biometric technology?

Biometrics is a way of ensuring privacy and security against identity theft. It also offers the facility of not lugging around many documents, or remembering umpteens of passwords, or entering personal identification numbers to access any sensitive personal information.

Biometrics helps identification and authentication quickly, thereby freeing people from undergoing too many security checks.

How does biometrics protect personal information?

A biometric record is an encrypted pattern stored in digital form. Only the specified state-of-the-art smart card reader can decrypt and read the information, making it much safer than passwords or PINs. Biometrics is like a huge hurdle between personal data and unauthorised access of information.