PAN not required for cash transactions up to ₹10 lakh:Hotel bill limit raised to ₹1 lakh; new Income Tax Act to take effect from April 1

The draft rules of the New Income Tax Act, 2025 propose several changes to PAN card requirements, aimed at reducing paperwork for small transactions. These rules are expected to be implemented from April 1, 2026. 1. Cash transactions: PAN exemption up to ₹10 lakh annually Under the proposed rules, PAN will be mandatory only if cash deposits or withdrawals exceed ₹10 lakh in a financial year. Currently, PAN is required for cash deposits above ₹50,000 in a single day at banks or cooperative banks. The move is expected to benefit small businesses and individual taxpayers. 2. Hotels, events, and property transactions The PAN requirement for hotel bills has been increased from ₹50,000 to ₹1 lakh. Bills below this amount will not require a PAN. The same limit will apply to payments made at convention centres and event management companies. For property transactions and gifts, the proposal raises the PAN threshold from ₹10 lakh to ₹20 lakh. 3. Vehicle purchases PAN will now be required for the purchase of two-wheelers or motor vehicles priced above ₹5 lakh. Earlier, PAN was mandatory for all four-wheelers, while two-wheelers were exempt regardless of price. 4. Insurance policies PAN will become mandatory to establish an account-based relationship with insurance companies. Until now, PAN was required only if life insurance premiums exceeded ₹50,000. Under the new system, every policy purchase will involve the creation of a permanent customer account. 5. Cryptocurrency transactions Crypto exchanges will be required to share transaction details with the Income Tax Department. Digital currencies have also been formally recognised as a mode of electronic payment under the proposed rules. When will the new rules apply? Following the Budget 2026 announcement, the CBDT has invited public feedback on the draft rules. After reviewing suggestions, the final rules are expected by early March, with nationwide implementation from April 1, 2026.