PAN Rule Changes 2026: Draft Income Tax Rules Explained

• Motor Vehicle Purchases: PAN will not be required for vehicles below ₹5 lakh. Earlier, PAN was mandatory for most vehicle purchases. High-value motorcycles are now included, while tractors are exempt.
• Property Transactions: PAN will be mandatory only for property deals above ₹20 lakh, increased from ₹10 lakh earlier.
• Hotel and Restaurant Payments: PAN required for payments exceeding ₹1 lakh, raised from the previous ₹50,000 limit.
• Cash Deposits and Withdrawals: PAN required for annual cash deposits or withdrawals of ₹10 lakh or more.

• Life Insurance Premium Payments: PAN required for all policy-related transactions, removing the earlier ₹50,000 threshold.
• Crypto Transactions: Cryptocurrency exchanges must report transaction details to tax authorities.

The proposed rules aim to reduce unnecessary paperwork for routine transactions while increasing monitoring of high-value financial activities. The focus is on improving transparency and reducing tax evasion.

The draft rules are open for public consultation until 22 February 2026. After reviewing feedback, the final version will be notified and is expected to come into effect from 1 April 2026.