Learn the latest PAN Rules 2026 under the Income Tax Act, 2025 and Income Tax Rules, 2026. Understand revised PAN quoting limits, Form 97 compliance, property transaction rules, reporting requirements, and important compliance changes.
Introduction
The Government has introduced significant amendments to PAN quoting and reporting requirements under the Income Tax Act, 2025 and Income Tax Rules, 2026. These changes aim to simplify compliance for small taxpayers while strengthening reporting mechanisms for high-value transactions.
The revised framework increases threshold limits for several transactions, expands reporting obligations, introduces Form No. 97 in place of Form 60, and modifies PAN applicability for property, banking, insurance, and financial transactions.
- Individuals
- Businesses
- Financial institutions
- Property buyers and sellers
- Banks and reporting entities
- Tax professionals and consultants
Understanding these changes is essential to avoid non-compliance, reporting defaults, and future scrutiny from the Income Tax Department.
1. Legal Background of PAN Rule Changes
The PAN compliance framework has been revised through:
- Income Tax Act, 2025
- Income Tax Rules, 2026
- Notifications and amendments issued by CBDT
The primary objective behind these changes is:
- Reduction in unnecessary PAN quoting
- Better reporting of high-value transactions
- Increased transparency in financial transactions
- Improved digital tax compliance
The Government has also aligned reporting obligations with the new “Tax Year” concept introduced from 1 April 2026.
2. Revised PAN Quoting Threshold for Immovable Property
One of the most important amendments relates to immovable property transactions.
Earlier Position
PAN quoting was generally required for transactions exceeding:
- ₹10 lakh
- ₹30 lakh in certain reporting situations
Revised Rule from 1 April 2026
The threshold has now been increased to:
- ₹45 lakh for mandatory reporting and compliance
Additionally, the scope has been expanded to include:
- Gift deeds
- Joint Development Agreements (JDA)
- Certain transfer arrangements
Compliance Impact
PAN becomes mandatory for:
- Purchase of property
- Sale of property
- Property gifts
- Development agreements
where transaction value exceeds ₹45 lakh.
This amendment aims to improve reporting of high-value real estate transactions and reduce tax evasion.
3. Form 97 Replaces Form 60
A major procedural change is the replacement of Form 60 with Form No. 97 under Rule 159 of the Income Tax Rules, 2026.
Earlier Practice
Individuals without PAN could furnish Form 60 for specified transactions.
New Rule
For immovable property transactions exceeding ₹45 lakh:
- Form 97 cannot be used as an alternative
- PAN is compulsory
Important Clarification
Individuals (other than companies and firms) involved in eligible property transactions must obtain PAN before completing the transaction.
This change reflects the Government’s stricter monitoring approach for high-value property dealings.
4. Changes in PAN Rules for Banking Transactions
A. Cash Deposits in Savings Accounts
Earlier Rule
PAN quoting requirement applied at lower annual limits.
Revised Rule
The annual threshold is now:
- ₹10 lakh where PAN is available
- ₹5 lakh where PAN is not available
This applies to aggregate deposits during the financial year.
B. Cash Withdrawals
A new PAN reporting requirement has been introduced for:
- Annual cash withdrawals exceeding ₹10 lakh
This amendment strengthens monitoring of large cash movements.
C. Bank Drafts and Pay Orders
The revised thresholds are:
- ₹10 lakh with PAN
- ₹5 lakh without PAN
These rules apply to cash payments made for:
- Demand drafts
- Pay orders
- Banker’s cheques
5. PAN Rules for Foreign Exchange Transactions
Foreign exchange transactions now carry revised reporting limits.
Revised Threshold
- ₹10 lakh where PAN is available
- ₹5 lakh without PAN
The amendment improves tracking of outward remittances and foreign exchange transactions under tax reporting systems.
6. PAN Requirements Relaxed for Certain Transactions
The Government has also relaxed PAN quoting requirements in specific cases.
Debit Card Applications
PAN is no longer mandatory for:
- Debit card applications
This change reduces compliance burden for ordinary banking customers.
Foreign Travel and Foreign Currency
Separate PAN reporting categories for:
- Foreign travel expenses
- Purchase of foreign currency
have now been removed under the revised rules.
7. New Reporting Obligations Introduced
Several new transactions are now reportable to the Income Tax Department.
A. Insurance Premium Receipts
Reporting threshold:
- ₹5 lakh with PAN
- ₹2.5 lakh without PAN
Insurance companies must maintain proper records and reporting compliance.
B. Stamp Paper Purchases
Transactions through Stock Holding Corporation of India Limited become reportable where:
- Amount exceeds ₹2 lakh with PAN
- Amount exceeds ₹1 lakh without PAN
C. Expanded Property Reporting
Reporting obligations now include:
- Gift transactions
- Joint Development Agreements
- High-value transfer arrangements
where value exceeds ₹45 lakh.
8. PAN Rules for Hotels, Banquets & Events
The threshold for PAN quoting in cash payments has been revised.
Earlier Limit
₹50,000 per transaction
New Limit
₹1 lakh per transaction
The revised scope now includes:
- Hotels
- Banquet halls
- Convention centres
- Event management services
This amendment impacts businesses involved in hospitality and event industries.
9. PAN Rules for Motor Vehicle Transactions
New compliance requirements apply for sale or purchase of motor vehicles.
PAN Mandatory
Where vehicle value exceeds: ₹5 lakh
Expanded Coverage
The rules now include: Certain two-wheelers
Exclusion
Purchase of tractors has been specifically excluded.
10. Government Objective Behind These Changes
The Government’s broader objective includes:
- Strengthening financial transparency
- Reducing unreported cash transactions
- Expanding digital compliance
- Tracking high-value economic activity
- Improving data analytics in tax administration
The revised rules also align with:
- Annual Information Statement (AIS)
- PAN-Aadhaar integration
- Taxpayer profiling systems
11. Important Compliance Instructions
Taxpayers should take the following precautions:
- Ensure PAN is linked with Aadhaar
- Update PAN details in banking records
- Review property transaction thresholds carefully
- Maintain proper documentation
- Verify reporting obligations before entering high-value transactions
Businesses and professionals should also update:
- ERP systems
- KYC documentation
- Compliance checklists
- Reporting software
Frequently Asked Questions (FAQs)
From 1 April 2026, PAN becomes mandatory for eligible immovable property transactions exceeding ₹45 lakh, including gift deeds and Joint Development Agreements.
Form 97 replaces Form 60 under the new Income Tax Rules, 2026. However, it cannot be used for certain high-value property transactions where PAN is compulsory.
Yes. PAN reporting requirement now applies for annual cash withdrawals exceeding ₹10 lakh.
The threshold has been increased from ₹50,000 to ₹1 lakh per transaction.
No. PAN quoting requirement for debit card applications has been removed.
Yes. PAN is mandatory where vehicle value exceeds ₹5 lakh. Certain two-wheelers are also covered.
These amendments increase reporting and compliance obligations. Failure to comply may result in scrutiny, notices, penalties, or transaction restrictions.
Conclusion
The PAN Rules 2026 represent a major shift in India’s financial reporting and compliance framework. While some requirements have been relaxed for ordinary transactions, reporting obligations for high-value transactions have become stricter.
Taxpayers, businesses, banks, and professionals must carefully understand the revised rules, updated thresholds, and Form 97 requirements to ensure proper compliance under the Income Tax Act, 2025.
Early preparation and system updates will help avoid penalties, reporting errors, and future litigation.
Prepared for educational and legal awareness purposes. Taxpayers should consult professionals for transaction-specific advice.
