New PAN Reporting Rules 2026 for Property, Jewellery & Cash Transactions

The Central Board of Direct Taxes (CBDT) has issued the Draft Income-Tax Rules, 2026 to facilitate implementation of the Income-Tax Act, 2025, which will come into force from 1 April 2026.

Among the key proposed changes is a significant revision in the rules governing the mandatory quoting and use of Permanent Account Number (PAN) in various financial transactions.

The objective is twofold — simplify compliance for regular financial dealings while tightening reporting requirements for high-value and trackable transactions.

🧠 Why Are PAN Requirements Being Modified?

Under the existing Income-Tax Rules, 1962, PAN quoting was required for numerous transactions, often even at relatively modest monetary limits. This created additional compliance requirements for ordinary taxpayers.

The draft rules aim to rationalise this framework by:

✔ Increasing the threshold limits for PAN quoting
✔ Removing PAN requirements for small, routine transactions
✔ Concentrating on high-value and reportable dealings
✔ Integrating with the data-driven compliance system under the new Act

These reforms form part of the broader simplification exercise under the Income-Tax Act, 2025. Once finalised and notified (expected before 1 April 2026), the revised rules will take effect from that date.

📊 Major Changes in PAN Quoting Requirements

✅ 1️⃣ Cash Deposits and Withdrawals

Existing Rule:
PAN is required if cash deposits exceed ₹50,000 in a single day with a bank or cooperative bank.

Proposed Rule:
PAN will be required only where total cash deposits or withdrawals during a financial year aggregate to ₹10 lakh or more across one or more bank accounts.

👉 This substantially reduces compliance for small and routine banking transactions.

✅ 2️⃣ Purchase of Motor Vehicles

Existing Rule:
PAN is mandatory for purchase of four-wheelers irrespective of value (generally not required for two-wheelers).

Proposed Rule:
PAN will be required only if the vehicle value exceeds ₹5 lakh, covering both cars and two-wheelers.

👉 This relaxes compliance for lower-value vehicle purchases.

✅ 3️⃣ Immovable Property Transactions

Existing Rule:
PAN is required for purchase, sale, gift, or joint development of property valued above ₹10 lakh.

Proposed Rule:
The threshold is proposed to be increased to ₹20 lakh.

👉 Smaller property transactions will no longer trigger PAN quoting obligations.

✅ 4️⃣ Hotel, Event and Lifestyle Expenditure

Existing Rule:
PAN is required where hotel or restaurant payments exceed ₹50,000, including banquet halls and event management services.

Proposed Rule:
The threshold is increased to ₹1 lakh for payments made to hotels, restaurants, banquet halls, convention centres, and event organisers.

👉 Many routine lifestyle and event payments will no longer require PAN quoting.

✅ 5️⃣ Insurance Relationships

Existing Rule:
PAN is required where annual insurance premium exceeds ₹50,000.

Proposed Rule:
PAN will be mandatory for any account-based relationship with an insurance company, irrespective of premium amount.

👉 This widens the reporting scope for insurance-related transactions.

⭐ Transactions Where PAN Remains Compulsory

The draft rules do not relax PAN requirements for tax-sensitive or high-value activities, including:

Filing income tax returns
Significant investments
Corporate and business compliance
Statutory reporting obligations

PAN continues to remain a central identifier in the Indian tax framework.

📌 Timeline for Implementation

The Draft Income-Tax Rules, 2026 were placed in the public domain for stakeholder feedback until 22 February 2026.

The Government is expected to finalise and notify the rules before 1 April 2026, coinciding with the enforcement of the Income-Tax Act, 2025.

This interim period allows taxpayers, professionals, and businesses to examine the proposed changes and prepare accordingly.

🧾 Why These Changes Are Significant

🌟 Reduced Compliance Burden

Higher thresholds mean fewer transactions will require PAN quoting, easing paperwork for common citizens.

📊 Targeted Data Collection

By focusing on larger financial transactions, the tax system can collect more meaningful and relevant information.

💼 Improved Ease of Doing Business

Streamlined PAN requirements reduce procedural friction in everyday financial dealings.

📌 Important Note

The above revisions are currently in draft form and have not yet been officially notified. They are subject to stakeholder feedback and final approval before becoming legally enforceable.