Pan Rules Change: The government is making changes to PAN rules. PAN will no longer be required for small transactions, while larger transactions will be more stringent. PAN will be mandatory for cash transactions exceeding ₹10 lakh annually at banks, vehicle purchases exceeding ₹5 lakh, and property transactions exceeding ₹20 lakh. The rules will come into effect on April 1st.
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Pan Rules Change: The government is preparing to amend the rules governing the display of PAN (Permanent Account Number) for all financial transactions. The aim is to reduce the requirement for PAN for small and routine transactions, while increasing the strictness for larger transactions.
The government has drafted new rules that will eliminate the need for PANs for small transactions. At the same time, monitoring of large financial transactions will be tightened to identify where large sums of money are coming from and going. This aims to simplify the process for the public and prevent tax evasion and fraud in large transactions.
These changes are part of the draft Income Tax Rules 2026, which will be implemented under the Income Tax Act 2025. This new law will come into effect on April 1. The Central Board of Direct Taxes (CBDT) is expected to take suggestions on these rules and make a final decision by early March. The new proposal increases the limits for many transactions, which will reduce paperwork for common expenses.
What are the current rules?
Currently, PAN is required if:
- More than ₹50,000 in cash is deposited in a single day.
- On the purchase of any motor vehicle except two-wheelers.
- On the purchase or sale of property worth more than ₹10 lakh.
- On paying life insurance premiums of more than ₹50,000 in a year.
What is proposed in the Draft Rules 2026?
- PAN will be required only if the total cash deposit or withdrawal from bank accounts during a financial year is ₹10 lakh or more.
- PAN will be required only if the purchase of a motor vehicle exceeds ₹5 lakh. Two-wheelers will also be covered after this threshold.
- PAN will be required for payments exceeding ₹1 lakh to hotels, restaurants, banquet halls, convention centers, or event managers.
- PAN will be mandatory for property purchases, sales, gifts, or joint development agreements exceeding ₹20 lakh.
- PAN will also be required for entering into account-based relationships with insurance companies.
The CBDT will issue a final notification after seeking stakeholder feedback. If approved, these new rules will come into effect from April 1, in conjunction with the Income Tax Act 2025.
