Jigar M. Patel
International Tax Attorney
On March 20, 2026, the Central Board of Direct Taxes (CBDT) vide Notification No. 22/2026, formally notified the Income-tax Rules, 2026. These rules serve as the procedural backbone of the Income-tax Act, 2025 and will come into effect from April 1, 2026. Amongst the key changes is a comprehensive revision of the provisions relating to the quoting of Permanent Account Number (PAN) in financial transactions.
PAN Quoting Rules Get a Reset – Higher Thresholds, Revised Compliance
The updated provisions, effective from 1st April, 2026, raise the thresholds for mandatory PAN disclosure across several high-value transactions. While the revised thresholds offer welcome relief, they also demand greater awareness of cumulative financial exposure over the year. The emphasis has shifted from isolated transactions to a taxpayer’s overall financial behaviour.
The following Chart highlights the important revisions to the PAN Quoting requirements under the new Income-tax Rules.
Revised PAN Quoting Requirements under New Income-tax Rules
| Transaction Category | Earlier Rule (till March, 2026) | New Rule (from 1st April, 2026) |
| Cash Deposits / Withdrawals | PAN required if amount exceeds Rs. 50,000 in a single day | PAN required only if aggregate amount exceeds Rs. 10 lakhs in a financial year |
| Purchase of Motor Vehicles | PAN required for all vehicle purchases (no threshold) | PAN required only if transaction exceeds Rs. 5 lakhs (both two wheelers and four wheelers) |
| Hotels / Restaurants / Events | PAN required if payment exceeds Rs. 50,000 | PAN required only if payment exceeds Rs. 1 lakh |
| Immovable Property Transactions | PAN required for transactions above Rs. 10 lakhs | PAN required only if transaction exceeds Rs. 20 lakhs |
New PAN Application Forms – A Segmented Approach
In addition to revising transaction thresholds, the Income-tax Rules, 2026 have streamlined the PAN application process by introducing category-specific forms, replacing the earlier generic formats. This segmentation enhances clarity, reduces ambiguity and aligns documentation requirements with the nature of the applicant.
| Category of Applicant | Current Form | Applicable Form (from 1st April, 2026) |
| Indian Individuals | Form 49A | Form no. 93 |
| Indian Companies / Domestic Entities | Form 49A | Form no. 94 |
| Non-Resident Individuals (NRIs) | Form 49AA | Form no. 95 |
| Foreign Entities | Form 49AA | Form no. 96 |
PAN Applications – Strengthening Identity Verification
A notable shift under the Income-tax Rules, 2026 is the discontinuation of Aadhaar-only based PAN applications. With effect from April 1, 2026, applicants will be required to furnish additional supporting documentation beyond Aadhaar to obtain a PAN. This move signals a conscious policy shift towards strengthening the robustness of the KYC framework and ensuring greater authenticity in taxpayer identification. By mandating supplementary documentation, the new regime aims to curb instances of duplicate or fraudulent PANs and enhance the overall integrity of the tax database, thereby reinforcing trust in India’s evolving compliance ecosystem.
Enhanced Security & Fraud Prevention
The old PAN cards were relatively easy to forge. The new system introduces:
- Digitally signed QR Codes – Every new card features an encrypted QR code. Financial institutions can scan it for quick offline verification of the cardholder’s details (Name, DOB, Photo) and to help confirm the card’s authenticity.
- Tamper-Proof Design – The cards now use advanced holographic security and microtext, making them quite difficult to tamper with and replicate.
