- Indian government proposes new Income-tax Rules, 2026, mandating PAN for high-value transactions
- PAN mandatory for property deals over Rs 20 lakh, up from Rs 10 lakh previously
- PAN required for motor vehicle purchases exceeding Rs 5 lakh, including two-wheelers
The Indian government has proposed changes to the Income-tax Rules, 2026, making Permanent Account Numbers (PAN) cards mandatory for certain high-value transactions. The government has released these rules to replace the existing ones framed under the old Income Tax Rules, 1962. As stated by the government, these proposals are part of a broader overhaul of India's tax regime, aimed at making the process easy and transparent. After considering suggestions, the government will finalise and implement the rules before April 1, 2026.
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Check all details about how PAN cards are used in various financial transactions:
1. Immovable Property Transactions: PAN required for property transactions exceeding Rs 20 lakh, which is up from Rs 10 lakh. It includes purchase, sale, gift, or joint development agreements.
2. Motor Vehicle Purchase: PAN is now required for motor vehicle purchases exceeding Rs 5 lakh, including two-wheelers that have been exempted so far. Tractors are still excluded. Those who buy premium bikes or expensive cars will need to quote PAN.
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3. Cash Deposits and Withdrawals: PAN required for aggregate cash deposits or withdrawals exceeding Rs 10 lakh in a financial year, across accounts. Under existing rules, it's required for cash deposits over Rs 50,000 in a day at a bank or post office. The move is expected to benefit the taxpayers and small cash-intensive businesses.
4. Hotel and Restaurant Payments: PAN required for cash payments exceeding Rs 1 lakh, which is up from Rs 50,000. The idea is to reduce unnecessary PAN quoting for moderate spending while still tracking very high-value expenses.
5. Insurance Account Relationship: PAN required to initiate an account-based relationship with insurance companies, irrespective of the premium amount.
PAN Linking and Inoperative PAN
Another draft rule clarifies how PAN interacts with Aadhaar linking. It mentions that if a person fails to link PAN with Aadhaar where required, the PAN can become inoperative, which can affect refunds, TDS rates and access to some financial services.
