The Indian government has proposed significant revisions to the rules governing the mandatory quoting of Permanent Account Number (PAN) for various financial transactions. Under the Draft Income Tax Rules, 2026, circulated by the Central Board of Direct Taxes (CBDT) under the Ministry of Finance, new thresholds are set for cash withdrawals and deposits, property transactions, and purchases of goods and services. These proposed changes aim to broaden the tax base and enhance financial transparency, with an intended effective date of April 1, 2023.

The proposed amendments primarily target Rules 114BA and 114BB of the Income Tax Rules, 1962, which currently define the scope for PAN submission. The objective behind these revisions is to track high-value transactions more effectively, thereby deterring the use of unaccounted money and curbing tax evasion. By expanding the types of transactions requiring PAN and revising some thresholds, the government seeks to bring more financial activities under the tax scanner.

One of the most notable changes involves cash transactions. While PAN was previously required for individual cash deposits above Rs 50,000 in certain accounts, the new draft rules propose a cumulative limit. This means individuals will be required to quote their PAN if their total cash deposits or withdrawals from one or more bank accounts, post office accounts, or co-operative bank accounts exceed Rs 20 lakh in a financial year. This cumulative approach signifies a shift towards broader monitoring of cash flow.

Furthermore, the draft rules introduce revised limits for other substantial transactions. Property transactions, which previously had varying reporting requirements, are now subject to a proposed new PAN quoting limit of Rs 10 lakh for sale or purchase. Similarly, the sale or purchase of goods and services is also expected to fall under a new PAN quoting threshold, likely to be Rs 20 lakh. These specific figures indicate an effort to capture a wider range of high-value exchanges that might currently escape scrutiny.

Key proposals outlined in the Draft Income Tax Rules, 2026, include:

  • Cash Withdrawals and Deposits: Mandatory PAN quoting if the aggregate of cash deposits or withdrawals from one or more accounts (bank, post office, co-operative bank) exceeds Rs 20 lakh in a financial year.
  • Property Transactions: PAN mandatory for sale or purchase of immovable property valued at or above Rs 10 lakh.
  • Sale/Purchase of Goods and Services: PAN required for transactions exceeding a cumulative value of Rs 20 lakh in a financial year.
  • Fixed Deposits: PAN quoting extended to fixed deposits with post offices and co-operative banks, with proposed limits of Rs 2 lakh per transaction. Existing bank fixed deposit rules for amounts exceeding Rs 50,000 continue.
  • Demat Accounts and Mutual Funds: PAN required for opening of Demat accounts and transactions involving mutual funds.
  • Unlisted Shares: Sale of unlisted shares above a certain threshold will require PAN.
  • Current Accounts/Cash Credit Accounts: Opening of current accounts or cash credit accounts will necessitate PAN submission.
  • Hotel/Restaurant Bills: PAN may be required for hotel or restaurant bills exceeding Rs 2 lakh.

These proposed revisions by the CBDT underscore the government's continued focus on enhancing financial transparency and expanding the direct tax base. By implementing stricter reporting requirements and revised thresholds for PAN quoting across various financial activities, the Draft Income Tax Rules, 2026, aim to streamline the identification of high-value transactions. While these are currently draft rules, their finalization is expected to significantly impact how individuals and entities conduct a broad spectrum of financial dealings, fostering greater accountability within the Indian economy. The proposed effective date for these changes is April 1, 2023.