The Income Tax Rules, 2026, have brought a comprehensive overhaul to Permanent Account Number (PAN) requirements across various financial transactions in India. The revised framework aims to streamline compliance for lower-risk activities while significantly enhancing oversight of higher-value financial operations, including real estate, cash deposits, and insurance payments. A notable change also sees the introduction of Form 97, which replaces Form 60 for individuals without a PAN.
Revised PAN Requirements for Key Transactions
Cash Deposits and Withdrawals
One of the most impactful changes relates to cash transactions. The previous daily PAN quoting requirement for cash deposits exceeding ₹50,000 has been abolished. However, annual reporting thresholds for cash deposits have been quadrupled, rising from ₹2.5 lakh to ₹10 lakh. Concurrently, annual cash withdrawals exceeding ₹10 lakh will now necessitate PAN reporting, bringing large withdrawals under closer tax scrutiny. The daily PAN requirement for cash payments toward bank drafts, pay orders, and banker's cheques has also been removed, though these transactions will still be monitored annually.
Real Estate Transactions
The scope of PAN compliance for property dealings has been expanded. The PAN quoting threshold for buying or selling immovable property has been increased from ₹10 lakh to ₹20 lakh, while the reporting threshold for such transactions has risen from ₹30 lakh to ₹45 lakh. Crucially, the new rules explicitly include gift deeds and Joint Development Agreements (JDAs) within the reporting ambit. Individuals engaged in property transactions exceeding ₹45 lakh are now mandated to obtain a PAN if they do not already possess one, a flexibility previously allowed through Form 60.
Foreign Travel and Forex
Separate PAN quoting requirements for foreign travel expenses and the purchase of foreign currency have been eliminated. Nevertheless, these transactions may still fall under the broader category of goods and services purchases if the payment exceeds ₹2 lakh per transaction. The reporting threshold for foreign exchange transactions will now vary based on whether the individual holds a PAN.
Insurance Premiums and Stamp Paper Purchases
The reporting net has been extended to cover additional transactions. Insurance companies are now required to report premium receipts exceeding ₹5 lakh for PAN holders and ₹2.5 lakh for individuals without a PAN. Similarly, stamp paper purchases have been brought under reporting requirements, with thresholds set at ₹2 lakh for PAN holders and ₹1 lakh for those without a PAN.
Hotels, Restaurants, and Events
The PAN quoting threshold for cash payments made at hotels and restaurants has been increased from ₹50,000 to ₹1 lakh per transaction. The rules also broaden the scope to include banquet halls, convention centers, and event managers. This means large cash payments for weddings and other events may now attract greater scrutiny from tax authorities.
Vehicle Purchases
PAN requirements continue to apply to vehicle purchases above ₹5 lakh. The revised rules specifically include two-wheelers covered under the Motor Vehicles Act, while tractors have been explicitly excluded.
Form 97 Replaces Form 60
A significant procedural change is the introduction of Form 97, which will now serve as the alternative for individuals who do not possess a PAN. However, this option will not be available for certain high-value property transactions exceeding ₹45 lakh, where obtaining a PAN has been made mandatory. These updated rules underscore the government's ongoing commitment to improving financial transparency and tax compliance across the nation.