Draft Income-tax Rules 2026: PAN Card Now Mandatory For These 5 Transactions

The Draft Income-tax Rules, 2026 represent a strategic recalibration by the tax authorities to modernize compliance. By proposing revised monetary thresholds for mandatory PAN quotation across a variety of financial transactions, the Draft Income-tax Rules, 2026, indicate a substantial adjustment of compliance standards.

By adjusting the monetary thresholds for mandatory Permanent Account Number (PAN) quoting, the government aims to strike a balance: reducing the paperwork for everyday citizens while tightening the net around high-value, high-risk financial movements. Here is a breakdown of the key proposed changes and what they mean for your wallet.

The Draft Income-tax Rules, 2026, propose revising several monetary thresholds for mandatory PAN quoting across different transactions to better align compliance requirements with transaction value and risk. By raising these thresholds, the government is acknowledging that inflation has changed what "high-value" means in today's economy.

S. No.	Nature of Transaction	Existing Rule Limit	Draft Rules 2026 Limit
1	Sale/purchase of a motor vehicle	All transactions (except two-wheelers)	Rs 5,00,000 (includes motorcycles; excludes tractors)
2	Cash payment to the hotel/restaurant	Rs 50,000 at one time	Rs 1,00,000
3	Life insurance premium	Rs 50,000 per year	Replaced by requirement at commencement of account-based relationship (all transactions)
4	Immovable property transaction	Rs 10 lakh	Rs 20 lakh
5	Cash withdrawals from the bank/post office	Rs 20 lakhs for a financial year	Rs 10 lakh in a financial year
Source: cleartax.in

As per CA Chandni Anandan, Tax Expert at ClearTax, here is a breakdown of the key proposed changes related to PAN card rules scheduled to take effect from April 1, 2026 and what they mean for your wallet.

Motor vehicle purchases:

The draft rules propose a threshold of Rs 5 lakh for quoting PAN in motor vehicle purchases. Earlier, PAN quoting was generally required for all car purchases, but not for two-wheelers. The revised limit is expected to reduce compliance for buyers of lower-priced cars while enabling closer monitoring of high-value two-wheeler transactions.

Cash withdrawals:

The withdrawal threshold linked to reporting is proposed to be reduced from Rs 20 lakh to Rs 10 lakh for the financial year, thereby enabling tighter monitoring of large cash withdrawals and improved tracking of substantial cash movements.

Cash deposits:

The annual threshold for cash deposits is proposed to increase from Rs 2.5 lakh to Rs 5 lakh for the financial year, thereby easing compliance for smaller deposits while continuing to monitor higher-value fund inflows into the banking system. However, the daily limit stays at Rs. 50,000.

Other high-value transactions (e.g., restaurant payments):

The threshold for certain transactions, such as cash payments to restaurants, is proposed to increase from Rs 50,000 to Rs 1 lakh, reducing scrutiny on routine or moderate-value spending and allowing authorities to focus on potentially higher-risk transactions.

Overall, the proposed revisions indicate a shift toward more targeted, risk-based PAN quoting requirements, tightening oversight for high-value transactions while reducing unnecessary compliance burden for lower-value, routine transactions.