New Delhi, February 21: The Central Board of Direct Taxes has unveiled the Draft Income Tax Rules 2026, proposing significant revisions to Permanent Account Number or PAN quoting requirements. The proposed norms, scheduled to take effect from April 1, 2026, aim to reduce compliance burden for routine transactions while tightening oversight of high value financial activity.

INR 10 Lakh Annual Limit for Cash Deposits and Withdrawals

One of the biggest changes is the shift from a daily cap to an annual aggregate threshold for cash transactions.

Currently, PAN must be quoted for cash deposits exceeding INR 50,000 in a single day. Under the draft rules, this will be replaced by a consolidated annual limit of INR 10 lakh. What Are the New PAN Rule Changes in Draft Income Tax Rules 2026 and How Will Higher Limits Impact You?

This means individuals can deposit or withdraw cash across all bank, co operative bank and post office accounts without quoting PAN, provided the total does not exceed INR 10 lakh in a financial year. The move is expected to benefit small traders and individuals handling moderate but frequent cash transactions. Income Tax Department Releases Draft Rules for 2025 Act, Seeks Public Feedback Till February 22.

Property PAN Threshold Raised to INR 20 Lakh

The draft rules propose increasing the PAN quoting threshold for sale, purchase or gift of immovable property from INR 10 lakh to INR 20 lakh.

The revision reflects rising property prices and inflation in urban and semi urban markets.

Hotel and Restaurant Cash Limit Doubled to INR 1 Lakh

At present, PAN is mandatory for cash payments above INR 50,000 at hotels and restaurants. The draft rules propose raising this limit to INR 1 lakh.

The higher threshold will also apply to banquet halls and event management services, offering relief to customers amid rising hospitality costs.

PAN Mandatory for Vehicles Above INR 5 Lakh

The government has proposed a value based filter for motor vehicle purchases.

Under the new rules, PAN will be required only if the purchase price of any motor vehicle, including two wheelers, exceeds INR 5 lakh. Agricultural tractors will remain exempt regardless of their price.

Insurance Sector Integration Strengthened

The draft rules also make PAN mandatory for initiating any account based relationship with an insurance company.

This replaces the current provision where PAN is required only if life insurance premiums exceed INR 50,000 in a year, expanding oversight within the insurance ecosystem.

Public Comments Open Till February 22

The proposals are part of the broader implementation of the Income Tax Act 2025, which seeks to modernise tax administration and simplify compliance.

The CBDT has invited stakeholder feedback on the draft rules until February 22, 2026. Final rules are expected to be notified in early March, ahead of the new financial year beginning April 1.

(The above story first appeared on LatestLY on Feb 21, 2026 04:46 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).