PAN Card Update 2026: The government has proposed important changes in the Draft Income Tax Rules 2026 related to PAN card quoting for major financial transactions. These changes aim to simplify compliance for small payments while strengthening monitoring of large cash movements and high-value deals.
The draft rules revise limits for cash deposits, withdrawals, property purchases, vehicle buying, and certain cash payments. If implemented from April 2026, these changes could impact how individuals and businesses report transactions and use PAN for financial activities.
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Revised PAN Quoting Rules Under Draft Income Tax Rules 2026
The Draft Income Tax Rules 2026 propose updated limits for quoting PAN in financial transactions. These revisions focus on yearly totals instead of single-day limits in some cases. The idea is to reduce paperwork for small payments while improving tracking of large financial activities.
The changes cover cash deposits, withdrawals, property deals, vehicle purchases, hotel payments, and insurance relationships. These proposed updates are expected to come into effect from the financial year 2026–27 after review and final approval.
Annual Cash Deposit And Withdrawal Threshold Changes
Under the draft proposal, PAN will be required when total cash deposits or withdrawals reach ₹10 lakh or more in a financial year. This rule will apply across one or more bank accounts held by an individual.
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Earlier, PAN was mainly required for cash deposits above ₹50,000 in a single day. The new rule shifts focus from daily limits to yearly totals, helping authorities track large cash movement more effectively.
PAN Card Update 2026: Overview Table
| Transaction Type | Current Rule | Proposed Draft Rule 2026 |
|---|---|---|
| Cash deposits | PAN required above ₹50,000 per day | PAN required at ₹10 lakh per year total |
| Cash withdrawals | Limited reporting focus | PAN required at ₹10 lakh per year total |
| Property transactions | PAN required above ₹10 lakh | PAN required above ₹20 lakh |
| Vehicle purchase | PAN needed for most car purchases | PAN required above ₹5 lakh value |
| Hotel payments in cash | PAN required above ₹50,000 | PAN required above ₹1 lakh |
| Insurance policies | PAN for large premium payments | PAN required when starting account relationship |
Property Transaction PAN Limit Increased To ₹20 Lakh
The draft rules suggest raising the PAN quoting limit for property deals to ₹20 lakh. This includes buying, selling, gifting, or entering joint development agreements involving property.
Previously, PAN was required for property transactions above ₹10 lakh. The increased threshold may reduce compliance requirements for smaller property deals, especially in semi-urban and rural areas.
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PAN Requirement For Vehicle Purchases Above ₹5 Lakh
Under the proposed changes, PAN will be required only if the purchase value of a vehicle exceeds ₹5 lakh. This applies to both cars and two-wheelers, depending on the final price.
This adjustment aims to make vehicle buying simpler for lower-cost purchases. It also ensures that high-value vehicle transactions remain under financial monitoring.
Higher Cash Payment Limit For Hotels And Restaurants
The draft rules suggest increasing the limit for PAN requirement in hotel or restaurant cash payments to ₹1 lakh. Earlier, PAN was needed if the cash bill crossed ₹50,000.
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This change may benefit travelers and customers who make occasional large payments. At the same time, authorities can still track very high cash transactions through PAN records.
Insurance Policy PAN Rules May Expand Coverage
The proposal also indicates that PAN could be required when starting an account-based relationship with an insurance company. This is not limited to only high-value premium payments.
Earlier, PAN was mainly needed for large insurance premiums above a certain limit. The new approach may ensure better identity verification from the beginning of the policy relationship.
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Expected Implementation Timeline And Public Consultation Process
The rules are currently in draft stage and open for feedback before final approval. Once reviewed, they are expected to be implemented from April 2026 as part of the financial year 2026–27.
Public consultation allows stakeholders to suggest improvements and clarify practical challenges. Final rules may include minor changes based on responses received during this process.
How The New PAN Rules May Impact Everyday Financial Activities
These changes may make small transactions easier by increasing thresholds for PAN quoting. Many individuals may not need to provide PAN for moderate payments or purchases.
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At the same time, large yearly cash movements will be monitored more closely. This can encourage people to use formal banking channels and maintain proper financial records.
Purpose Behind Updating PAN Transaction Reporting Limits
The main goal of revising PAN limits is to improve transparency in financial transactions. By tracking yearly cash movement, authorities can better identify unusually high cash activity.
Another aim is to reduce compliance pressure for small taxpayers. The updated limits balance ease of doing transactions with stronger oversight of large financial dealings.
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