PAN card rules change: Check major changes effect from April 1

PAN card rules change: The Central Board of Direct Taxes (CBDT) has released the Draft Income-tax Rules, 2026, which aim to simplify compliance and align with the new Income Tax Act, 2025.

These rules are indeed under public consultation until February 22, 2026, with the final versions set to take effect from April 1, 2026. The proposed changes to the Permanent Account Number (PAN) requirements are quite significant, generally increasing the thresholds before you are required to provide your PAN.

Key Changes in PAN Quoting Rules:

The draft rules focus on high-value transactions while reducing the paperwork for daily activities. Here is how the proposed rules compare to the current ones:

Transaction Type – Current PAN Rule – Proposed Rule (Draft 2026):

Cash Deposits/Withdrawals: Required for deposits > RS 50,000 in a day – Required for aggregate Rs 10 lakh or more in a year

Motor Vehicle Purchase: Mandatory for all (except 2-wheelers) – Required only if price exceeds Rs 5 lakh (includes 2-wheelers)

Immovable Property: Required for deals > Rs 10 lakh – Threshold doubled to Rs 20 lakh

Hotels & Event Bills: Required for payments > Rs 50,000 – Threshold doubled to Rs 1 lakh

Insurance Policies: Required if premium > Rs 50,000/year – Mandatory for initiating any account-based relationship.

Impact on Financial Behavior:

These reforms are designed to leverage technology and data-sharing between institutions rather than relying on manual disclosures for smaller amounts.

Banking Convenience: Moving from a “daily limit” to an “annual aggregate” for cash transactions simplifies life for small business owners who may frequently deposit sums just above Rs 50,000 but stay well below the Rs 10 lakh annual mark.

Vehicle Purchases: Most entry-level cars and standard two-wheelers will no longer require a PAN, which reduces the administrative burden at dealerships.

Insurance Shift: While other thresholds have gone up, the insurance sector is seeing a tightening. By requiring a PAN at the start of any “account-based relationship,” the government aims to track insurance as a financial asset more closely from day one, regardless of the premium size.

Other Notable Reforms Beyond PAN rules, the draft includes:

Crypto Reporting: Crypto exchanges will be required to share transaction data with the tax department (starting in 2027 for the 2026-27 FY).

Digital Currency: The Central Bank Digital Currency (CBDC) is now officially recognized as an accepted mode of electronic payment for tax purposes.

HRA Benefits: The list of “Metro” cities for 50% HRA exemption is proposed to expand to include Bengaluru, Pune, Ahmedabad, and Hyderabad.

Also Read: UPI Payment Rules Changed: Know the updates before made transaction