The government will soon introduce biometric permanent account numbers for income tax payers, though initially only new applicants would be brought under its net, Finance Minister P Chidambaram said on Monday.

"There is progress on biometric PAN cards. Features have been finalised, what biometric measure will be used in the PAN card is being identified," he said when asked about the progress on government's proposal last year to introduce biometric PAN cards.

He said the bids would soon be invited by the Central Board of Direct Taxes in this regard to issue PAN cards with biometric features.

The biometric PAN card could use 'iris' scan for identification. This means that one might have to provide fingerprint or iris/retina impression.

The Income Tax department had mooted introducing such cards about two years ago, when it found that over 13 lakh people out of about total four crore PAN card holders had duplicate cards.

Most of them had provided wrong information about their home address or even furnished different names in the column of father's name to get two or three PAN cards.

The move has been, however, delayed due to lack of consensus in the department over the use of technology and due to high costs.

Currently, a PAN card costs about Rs 60. A biometric PAN card, however, will cost anything between Rs 200 and Rs 300, sources said.

Chidambaram further said the biometric cards would be introduced only for new applicants, and 'old PAN cards will be valid.'

Biometric PAN cards will not only provide a unique identity to the assessee, but also discourage evading of information regarding investments and high value transactions.

These are expected to reduce chances of duplication and ensure better tax compliance as well.

Although initially only new applicants would be provided such cards, the current taxpayers may be later asked to switch over to biometric PAN cards in a phased manner, sources said.

At present, it is compulsory to quote 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; depositing amounts more than Rs 50,000 with a bank or a post office, buying mutual funds or stocks.

The step to introduce biometric PAN cards has been undertaken not just by recent incidents of issue of fake cards but also due to terror threat. The government fears that PAN cards could be an easy tool for terrorists to open bank accounts to finance their activities.