PAN Rules to Change From 2026: Higher Limits for Cash, Property, Vehicles, and Payments
PAN rules to change from 2026 with higher limits for bank cash transactions, property deals, vehicle purchases, and payments under the new Income Tax Act, 2025.
New PAN rules from 2026 are set to bring major changes in financial transactions across India, including cash deposits and withdrawals in banks, property deals, vehicle purchases, hotel and restaurant payments, and insurance transactions. The central government aims to make the tax system more transparent and simpler under the upcoming Income Tax Act, 2025.
Table of Contents
These changes will come into effect from April 1, 2026, along with the new financial year 2026–27.
New PAN Rules to Be Finalised Soon
According to the draft Income Tax Rules, the government has proposed higher PAN reporting limits for several transactions starting in 2026.
After consultations with stakeholders, the Central Board of Direct Taxes (CBDT) is expected to notify the final rules by the first week of March.
Bank Cash Transactions: Annual Limit Introduced
Under the proposed rules:
- PAN will be mandatory if ₹10 lakh or more is deposited or withdrawn in a financial year across one or more bank accounts
- Currently, PAN is required for cash transactions above ₹50,000 in a single day
- The new rule shifts the focus to annual transactions instead of daily limits
PAN Mandatory for Vehicle Purchases Above ₹5 Lakh
The draft rules propose:
- PAN compulsory for buying any vehicle, including motorcycles, if the cost is above ₹5 lakh
- At present, PAN is not required for motorcycle purchases
- PAN is already mandatory for cars and other higher-value vehicles
Higher PAN Limit for Hotel and Event Payments
For payments made to:
- Hotels
- Restaurants
- Convention centres
- Banquet halls
- Event management services
PAN will be required if the bill exceeds ₹1 lakh.
Currently, the limit is ₹50,000.
Property Deals: PAN Threshold Raised
For property-related transactions:
- PAN will be mandatory if the property value exceeds ₹20 lakh
- This applies to purchase, sale, gift, or joint development agreements
- The existing limit is ₹10 lakh
Insurance Transactions: PAN Required at Entry Level
Under the new rules:
- PAN will be mandatory to start account-based transactions with insurance companies
- Currently, PAN is required only if annual life insurance premium exceeds ₹50,000
Changes in Allowances and Employee Benefits
The draft rules also propose revisions based on current market conditions:
Vehicle Allowance:
- ₹8,000 per month (including driver) for cars with engine capacity below 1.6 litres
- ₹10,000 per month for larger vehicles
Free Meals:
- If an employer provides free food and non-alcoholic beverages, its value will be counted as ₹200
HRA Metro Cities List Expanded
For House Rent Allowance (HRA) benefits:
- Hyderabad, Bengaluru, Pune, and Ahmedabad have been added to the metro cities list
- Earlier, only Delhi, Mumbai, Chennai, and Kolkata were included
Crypto and Digital Currency Under Tax Watch
The new rules also focus on digital assets:
- Crypto exchanges must share transaction details with the Income Tax Department
- Central Bank Digital Currency (CBDC) has been included in the electronic payment system
Aim: Transparency and Simpler Tax System
The government said these proposed changes aim to:
- Increase financial transparency
- Curb tax evasion
- Simplify tax compliance
- Make the system more efficient and user-friendly
With PAN rules changing from 2026, individuals and businesses are advised to prepare for stricter but clearer financial reporting norms.
Munsif News 24×7 will continue to track updates on the new Income Tax rules and PAN-related changes.
Follow MunsifNews24x7 for latest updates.
