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The draft Income-tax Rules 2026 propose higher PAN-quoting thresholds for cash deposits, motor vehicle and property transactions, hotel and event payments, and insurance accounts, easing compliance for high-value financial activities.
The draft Income-tax Rules 2026 propose a significant increase in transaction limits for mandatory quoting of Permanent Account Number (PAN) across a range of financial activities, including cash deposits and withdrawals, purchase of motor vehicles and property, and payments for hotel and event-related services.
Cash deposits and withdrawals
Under the proposed Income Tax Rules, 2026, quoting of PAN will be mandatory for cash deposits or withdrawals aggregating to ₹10 lakh or more in a financial year across one or more bank accounts. At present, PAN is required for cash deposits exceeding ₹50,000 in a single day.
Motor vehicle purchases
For motor vehicle purchases, including two-wheelers, PAN will be required only if the purchase price exceeds ₹5 lakh. Currently, PAN is mandatory for all motor vehicle purchases regardless of value, while two-wheelers are excluded.
Hotel, event and restaurant payments
For hotel and restaurant bills, as well as payments to convention centres, banquet halls, or event management service providers, PAN will be required only if the payment exceeds ₹1 lakh, compared with the existing threshold of ₹50,000.
Property transactions
For transactions involving immovable property, including purchase, sale, gift, or joint development agreements, PAN will be mandatory if the transaction value exceeds ₹20 lakh, up from the current limit of ₹10 lakh.
Insurance accounts
The draft rules also mandate PAN for initiating an account-based relationship with an insurance company. Currently, PAN is required only when life insurance premiums exceed ₹50,000 in a financial year.
Proposed PAN Quoting Requirements – Draft Income‑tax Rules, 2026
| Category | Current PAN Requirement | Proposed PAN Requirement (Draft Rules 2026) | Change |
|---|---|---|---|
| Cash deposits & withdrawals | PAN required for cash deposits > ₹50,000 in a single day | PAN mandatory for cash deposits or withdrawals ≥ ₹10 lakh in a financial year across one or more bank accounts | Major threshold increase; includes withdrawals |
| Motor vehicle purchases | PAN mandatory for all motor vehicle purchases, excluding two‑wheelers | PAN required only if purchase price > ₹5 lakh, including two‑wheelers | Threshold-based requirement; two‑wheelers now included |
| Hotel, restaurant & event-related payments | PAN required for payments above ₹50,000 | PAN required only for payments > ₹1 lakh | Threshold doubled |
| Immovable property transactions | PAN required for transactions over ₹10 lakh | PAN required for transactions exceeding ₹20 lakh | Threshold doubled |
| Insurance (account-based relationship) | PAN required only if life insurance premiums > ₹50,000 in a year | PAN required for initiating any account-based relationship with insurance companies |
Why These Changes Matter
- Compliance relief: Higher thresholds mean many smaller or routine transactions no longer need PAN, reducing documentation and administrative burdens.
- Modernisation: The amendments align PAN requirements with current price levels and the realities of everyday financial activity.
- Continued oversight: For truly high-value or aggregate transactions, PAN quoting remains, helping the tax authorities monitor and track potential tax liabilities.
These proposals are part of the draft rules under the new Income Tax Act framework and, if finalised, could take effect from April 1, 2026.