PAN rules have changed since 2026, and taxpayers ignoring the new limits on cash deposits, property deals, insurance premiums and large payments could face closer scrutiny by the Income Tax Department.
The updated Income Tax Rules, 2026 relax norms to quote Permanent Account Number for several routine transactions, including certain cash deposits and foreign travel spends. At the same time, the government has tightened monitoring of high-value property transactions, insurance payments, cash withdrawals and event-related spending.
The new framework also replaces Form 60 with Form 97, narrowing the scope for completing major financial transactions without PAN.
From buying property to depositing cash in banks, the revised rules redraw where PAN is optional, where reporting thresholds have changed, and where taxpayers could still come under the tax department’s radar.
PAN no longer needed in several transactions
One of the biggest changes is the removal of mandatory PAN quoting for some transactions where taxpayers earlier had to furnish the number immediately.
Among the key relaxations:
1. Cash deposits above Rs 50,000 in a day
Earlier, depositing more than Rs 50,000 in cash in a single day required PAN disclosure. That condition has now been removed.
However, banks will still report annual cash deposits once they cross the revised threshold of Rs 10 lakh, up from the earlier Rs 2.5 lakh limit.
2. Bank drafts and pay orders bought in cash
Taxpayers earlier needed PAN while making cash payments above Rs 50,000 for bank drafts, banker’s cheques or pay orders in a day.
The daily PAN requirement has now been relaxed, though annual monitoring provisions may still apply.
3. Foreign travel expenses
The separate PAN category for overseas tour expenditure has been removed under the new rules.
This means taxpayers may no longer need PAN specifically for booking foreign travel packages unless the payment falls under broader high-value purchase reporting rules.
4. Foreign currency purchases
Buying foreign exchange will also no longer attract a separate PAN quoting rule.
Still, these transactions may come under reporting norms if the amount exceeds prescribed thresholds.
5. Hotel and restaurant cash payments below revised limits
The threshold to quote PAN for cash payments to hotels or restaurants has been raised from Rs 50,000 to Rs 1 lakh per transaction.
This gives relief to individuals making large event-related or hospitality payments made in cash.
Conversely, tractors have been excluded from the scope.
What taxpayers should watch out for
While the new rules ease documentation requirements in some areas, they also signal stronger surveillance of large-value spending.
Tax experts say taxpayers should particularly keep track of:
Annual cash deposits and withdrawals
Property transactions above Rs 45 lakh
Large insurance premium payments
Event-related cash spending
High-value purchases without PAN
The broader direction of the proposed rules suggests the government is trying to simplify compliance for routine banking activity while tightening data collection for transactions linked to wealth creation and asset ownership.
Routine cash transactions may involve fewer immediate PAN formalities, but high-value deals will face deeper reporting scrutiny than before.
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