The draft Income-tax Rules 2026 propose sweeping changes to Permanent Account Number (PAN) quoting norms, altering thresholds for cash deposits, withdrawals and other high-value transactions. The proposed framework seeks to improve compliance, expand the tax base, and lessen the reporting burden on small transactions while increasing scrutiny on significant cash moves. It is in line with the impending Income-tax Act, 2025.
As per the draft I-T Rules 2026, scheduled to be implemented from April 1, two major changes linked to PAN card disclosure over high-value transactions involve deposits of Rs 10 lakh or more in a bank account and buying or selling of immovable property worth Rs 20 lakh and above.
Here are five key PAN-related changes that could affect how individuals and businesses handle cash deposits and withdrawals.
PAN required for annual cash deposits in banks/post offices
Under the proposed regulation, PAN will be required if total cash deposits or withdrawals from one or more accounts in a financial year exceed Rs 10 lakh. Currently, cash deposits over Rs 50,000 in a single transaction require PAN disclosure.
This new rule is a huge relief for regular small transactions. The purpose of this change is to improve financial transparency and prevent possible tax evasion through significant cash withdrawals. The proposed PAN update will also reduce compliance burden for banks.
Transactions involving immovable property
The existing regulation requires quoting of PAN for real estate transactions exceeding Rs 10 lakh. The new rules propose to increase this amount to Rs 20 lakh. While keeping an eye on major real estate transactions, this reduces the compliance burden for smaller real estate transactions.
Higher PAN threshold for hotel and event payments
Currently, payments for hotel and restaurant bills exceeding Rs 50,000 must be made with the disclosure of PAN. This threshold has been raised to Rs 1 lakh under the draft regulations. The step ensures that scrutiny is directed toward significant cash transactions rather than regular expenses by limiting compliance obligations to high-value expenses.
Mandatory Quoting of PAN For Insurance
As per existing guidelines, quoting of PAN was mandatory for insurance policies where premiums exceeded Rs 50,000 in a financial year. However, the draft rules have widened the scope of PAN pertaining to insurance policies. Now, PAN will be mandatory for all account-based relationships with insurance companies. This change strengthens customer identification norms and expands reporting coverage beyond high-premium policies.
Revised PAN thresholds for property and vehicle purchases
Under the current regulation, PAN is required for all vehicle purchases (except two-wheelers). However, the draft rules propose that the PAN requirement be applied to motorbike or car purchases worth more than Rs 5 lakh. However, the proposed changes apply to expensive motorcycles but not tractors. The change increases control of high-value transactions, such as those involving luxury two-wheelers, while reducing compliance for lower-value car purchases.
The government has sought feedback from interested parties and stakeholders following the release of the Draft Income-tax Rules, 2026. The deadline for submitting feedback is Feb. 2. Following feedback, the government will review and approve the updated draft, which will come into effect from April 1.
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