Proposed PAN Rule Changes 2026: New Limits for Cash Deals, Vehicle Purchases and More
The Central Board of Direct Taxes (CBDT) has released draft Income Tax Rules, 2026 with major proposed changes in when and where taxpayers need to quote their PAN (Permanent Account Number). These changes are part of the transition to the new Income Tax Act, 2025 and are expected to take effect from April 1, 2026 once finalised.The aim is to ease compliance for small/medium transactions while focusing tax reporting on higher‑value deals, cutting paperwork for ordinary citizens and data-aligning thresholds with current economic realities.🔹 1. Cash Deposits & WithdrawalsUnder the proposed rules, quoting PAN will be mandatory only if total cash deposits or withdrawals in a financial year aggregate to ₹10 lakh or more across one or more bank accounts. Earlier, taxpayers had to quote PAN for cash deposits above ₹50,000 in a single day.What this means:
👉 PAN will be mandatory only if the vehicle price exceeds ₹5 lakh. This applies to cars and two‑wheelers (including motorcycles).Current Rule:
✔️ More clarity with higher thresholds for everyday dealings
✔️ Focus on higher‑value reporting, improving compliance efficiencyThese changes reflect the government’s effort to modernise tax requirements, simplify compliance, and make PAN guidelines more relevant to today’s economic environment. Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.
- PAN not required for smaller cash dealings under ₹10 lakh in a year.
- PAN required only for larger annual cash movement, simplifying low‑value compliance.
👉 PAN will be mandatory only if the vehicle price exceeds ₹5 lakh. This applies to cars and two‑wheelers (including motorcycles).Current Rule:
- PAN had to be quoted for all car purchases irrespective of price, and two‑wheelers were exempt.
- No PAN is required if the vehicle costs less than ₹5 lakh, reducing compliance for more affordable vehicles.
- PAN mandatory for hotel or restaurant bills, convention halls, banquet services or event management payments above ₹1 lakh — up from the current ₹50,000 limit.
- Everyday dinners and hotel stays below ₹1 lakh won’t require PAN details.
- Big event costs or wedding payments above ₹1 lakh will still need PAN quoting.
- PAN must be quoted for purchase, sale, gift or joint development agreements of property valued above ₹20 lakh, raising the earlier limit from ₹10 lakh.
- Insurance relationships: PAN may be required to establish an account‑based relationship with an insurer, rather than only if annual premium crosses a certain amount.
✔️ More clarity with higher thresholds for everyday dealings
✔️ Focus on higher‑value reporting, improving compliance efficiencyThese changes reflect the government’s effort to modernise tax requirements, simplify compliance, and make PAN guidelines more relevant to today’s economic environment. Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.