New Delhi: The government is planning big changes in rules related to quoting Permanent Account Number (PAN) for financial transactions. These changes are part of the draft Income-tax Rules 2026. The aim is to make compliance easier for small transactions while improving tracking of large financial activities.
The new rules will support the Income Tax Act 2025, which will start from April 1. The Central Board of Direct Taxes (CBDT) is expected to finalise these rules after consultations and notify them by early March.
Higher Limits For Cash Deposits And Withdrawals
Under the draft rules, PAN will be required only if total cash deposits or withdrawals reach Rs 10 lakh or more in one financial year across bank accounts.
Currently, PAN is needed if cash deposit crosses Rs 50,000 in one day. The new proposal gives relief for smaller daily cash transactions and focuses on yearly high-value movement of money.
PAN Rules For Vehicle Purchases To Become Value-Based
The draft rules propose that PAN will be required only if a motor vehicle purchase exceeds Rs 5 lakh.
At present, PAN is mandatory for all motor vehicle purchases except two-wheelers. The new rule includes two-wheelers but only if the value crosses the Rs 5 lakh limit.
Relief For Hotel, Restaurant And Event Payments
PAN will be required only if payments to hotels, restaurants, banquet halls, convention centres or event managers exceed Rs 1 lakh.
Right now, PAN is required if such payments cross Rs 50,000. The new limit doubles the threshold and reduces compliance for normal spending.
Property Transaction Limits May Double
For property deals such as purchase, sale, gifts or joint development agreements, PAN will be required only if the value exceeds Rs 20 lakh.
Currently, PAN is needed for property transactions above Rs 10 lakh. The proposed change increases the limit significantly.
PAN To Become Mandatory For Insurance Account Opening
The draft rules also expand PAN requirements for insurance. PAN will be required to open any account-based relationship with insurance companies.
Earlier, PAN was needed only if life insurance premium crossed Rs 50,000 per year.
What Happens Next?
CBDT will review stakeholder feedback before final notification. If approved, the new rules will come into force along with the Income Tax Act 2025 from April 1.
