New PAN Quoting Rules For These 5 Transactions Proposed in IT Rules 2026

Mumbai: Last week, the government released the draft Income Tax Rules 2026 proposing to significantly raise the transaction limits for quoting of PAN for cash deposits/withdrawal in banks, purchase of motor vehicles and property, payment of hotel bills and insurance premium.

The following five key PAN-related changes could bring significant relief to common taxpayers and small businesses that handle cash deposits and withdrawals.

Cash deposits at bank or post office—Under the proposed regulation, PAN will be required if total cash deposits or withdrawals from one or more accounts in a financial year exceed Rs 10 lakh. Currently, cash deposits over Rs 50,000 in a single transaction require PAN disclosure.

Sale/purchase of motor vehicle–In the case of motor vehicles (including motorcycles), the PAN requirement will be a must if the price exceeds Rs 5 lakh (excluding tractors). Under the existing Income Tax Rules, 1962, quoting of PAN is mandatory for sale and purchase of all vehicles except two wheelers.

Cash payment to hotel/restaurant—The draft norms have proposed to increase the threshold for quoting PAN if the payment to hotels/restaurant bills exceeds Rs one lakh from the existing limit of Rs 50,000.

Life Insurance premium—The proposed norms shift from payment based threshold to relationship based reporting. PAN will be mandatory for starting an account-based relationship with an insurance company. Under the old norms, payments aggregating to more than ₹50,000 in a financial year as life insurance premiums require a PAN.

Immovable property transaction—For immovable property including sale, purchase, gift, or joint development agreements, the limit will increase from ₹10 lakh to ₹20 lakh, allowing smaller real estate deals to proceed with less documentation.

These draft rules are open for public feedback until February 22, 2026, on the Income Tax portal. After this feedback, the CBDT is expected to notify the norms, they will replace the Income Tax Rules 1962. The New Income Tax Act, 2025 as well as the proposed changes are set to take effect from 1 April 2026, which means the ITR-related changes will impact ITR filed in 2027 (for income earned in FY 2026–27).