Draft Tax Rules to Ease PAN Compliance for Digital Payments
India's draft 2026 income tax rules propose changes to ease compliance for routine digital transactions by raising the threshold for requiring a Permanent Account Number (PAN). The new framework aims to reduce friction for most digital commerce while tightening oversight on high-value cash dealings.
- The proposed rules raise the PAN requirement threshold for cash deposits and withdrawals from the current ₹50,000 in a single day to an annual aggregate of ₹10 lakh across all bank accounts. For cash transactions exceeding ₹20 lakh, PAN verification will be mandatory. - For real estate, the transaction value requiring a PAN is set to double, increasing from the current ₹10 lakh to ₹20 lakh for the sale or purchase of immovable property. - The rules for vehicle purchases will also change; PAN will only be mandatory for motor vehicles, including motorcycles, costing more than ₹5 lakh, whereas the current rule applies to all motor vehicles regardless of price. - In the hospitality sector, the threshold for requiring PAN for a single cash payment to hotels, restaurants, or for events is proposed to be increased from ₹50,000 to ₹1 lakh. - A significant change is proposed for insurance policies, where PAN will be required at the start of any "account-based relationship," moving away from the current rule that only mandates it for annual premiums exceeding ₹50,000. - The draft rules, released by the Central Board of Direct Taxes (CBDT), are part of the new Income Tax Act, 2025, and are slated to take effect on April 1, 2026, after a period of public consultation.
