The government has decided to issue biometric PAN cards to taxpayers across the country to weed out the problem of duplicate and fake ones.

The decision was taken recently by the Finance Ministry and it comes in the wake of a Comptroller and Auditor General (CAG) report that asked the Income Tax department to ensure that a single tax payer is not issued multiple cards.

The proposed new biometric Permanent Account Number (PAN) cards would bear the I-T assessee' fingerprints (two from each hand) and the face.

There could be an option to existing PAN card holders to opt for the biometric cards, but it may not be mandatory, a senior official in the I-T department said.

The Finance Ministry and the I-T department had put on hold the biometric PAN card project last year to avoid duplication with the UID numbers to be issued by Nandan Nilekani's Unique Identity Authority of India (UIDAI).

"The bioemetric PAN card project is on again. The step will be very important when it comes to stopping the misuse of this vital identity document," top sources in the Finance Ministry said.

The biometric PAN card was proposed by the then Finance Minister P Chidambaram in 2006 to counter the problem of duplicate PAN cards which were uncovered during I-T searches and raids by police and other enforcement agencies.

The CAG report for 2010-11 on direct taxes, tabled in Parliament recently, has revealed that 958 lakh (95.8 million) PANs were issued up to March 2010 but I-T returns filed in the last fiscal were only 340.9 lakh (34.09 million).

The gap between PAN holders and the number of returns filed was 617.1 lakh (61.7 million), the CAG has said.

Suggesting the Central Board of Direct Taxes (CBDT) to identify the reasons for the gap and use the information to enhance the assessee base, the CAG has said it may be due to issuance of multiple PAN cards and death of some PAN card holders.

"The (I-T) department needs to put in place appropriate controls to weed out the duplicate PANs and also update the position in respect of deceased assessees," the report has said.

The plan has been set rolling for issuance of biometric PAN cards, according to sources. It is expected that the first such cards could be issued by late this year, they said.

While PAN is a 10-digit alphanumeric number allotted by the I-T department to taxpayers, biometrics uses biological method to identify physical features of an individual.