The central government has proposed significant changes to the quoting of Permanent Account Number (PAN) in its recently released “Draft Income Tax Rules, 2026.” Scheduled to take effect from April 1, 2026, these proposals aim to simplify the tax system and reduce compliance burdens for small-scale taxpayers while tightening oversight on high-value transactions.

Key Highlights of the Proposed Changes:

• Bank Transactions: Currently, PAN is mandatory for cash deposits exceeding ₹50,000 in a single day. The new draft proposes making it mandatory only if the aggregate cash deposit or withdrawal exceeds ₹10 lakh in a financial year across one or more accounts.
• Buying Vehicles: PAN will no longer be required for buying cars or two-wheelers priced below ₹5 lakh. At present, PAN is mandatory for all motor vehicle purchases regardless of the value.
• Hotel and Event Bills: For those spending at hotels, restaurants, or banquet halls, the threshold is proposed to be doubled from ₹50,000 to ₹1 lakh.
• Real Estate Transactions: For buying, selling, or gifting immovable property, the threshold for quoting PAN is set to increase from ₹10 lakh to ₹20 lakh.
• Insurance Sector: A PAN card will become mandatory for initiating any account-based relationship with an insurance company, expanding the scope from the current ₹50,000 premium limit.

The Income Tax Department has invited public feedback on these draft rules until February 22, 2026. After reviewing stakeholder inputs, the final notification is expected by the first week of March.