PAN Quoting Threshold Limits for Banking, Property & Cash Deals under Draft Income Tax Rules, 2026

The Central Board of Direct Taxes (CBDT), through the Draft Income-tax Rules, 2026, has proposed Rule 159, prescribing transactions where quoting or applying for a Permanent Account Number (PAN) is mandatory under sections 262(1)(f), 262(10)(c) and 262(10)(e) of the Income-tax Act, 2025.

The rule aims to enhance financial transparency, track high-value transactions, and strengthen the reporting framework by placing clear compliance responsibilities on individuals, businesses, banks, and intermediaries.

Mandatory PAN Quoting for Specified Transactions

As per Rule 159(1), every person must quote PAN in documents relating to specified transactions once the prescribed transaction value threshold is crossed. The responsibility to ensure PAN compliance lies with the person issuing or receiving the document, such as banks, financial institutions, intermediaries or service providers.

Key transactions covered include:

Banking, Financial & Investment Transactions

• Credit card applications – PAN mandatory for all cases
• Opening accounts with depositories, custodians or SEBI-registered intermediaries – PAN mandatory
• Purchase of RBI bonds – Amount exceeding Rs 50,000
• Purchase of mutual fund units – Amount exceeding Rs 50,000
• Contracts for sale or purchase of securities (other than shares) – Exceeding Rs 1 lakh per transaction
• Purchase of unlisted company shares – Exceeding Rs 1 lakh per transaction
• Purchase of bonds or debentures issued by a company or institution – Exceeding Rs 50,000

Cash Deposits, Withdrawals and Deposits

Rule 159 also covers large cash movements to prevent misuse of banking channels:

• Cash deposits with banks or post offices aggregating to Rs 10 lakh or more in a financial year
• Cash withdrawals aggregating to Rs 10 lakh or more in a financial year
• Time deposits with banks, post offices, NBFCs or Nidhis exceeding Rs 50,000, or Rs 5 lakh in aggregate during a financial year

In all such cases, quoting PAN becomes mandatory.

PAN Requirement for Property and Vehicle Transactions

High-value asset transactions have been brought under strict PAN reporting:

• Sale, purchase, gift or joint development agreement of immovable property exceeding Rs 20 lakh, or where stamp valuation exceeds Rs 20 lakh
• Sale or purchase of motor vehicles or motorcycles (excluding tractors) exceeding Rs 5 lakh

For immovable property transactions exceeding Rs 45 lakh, individuals without PAN must compulsorily apply for PAN before entering into the transaction.

PAN for High-Value Consumption and Business Transactions

Rule 159 extends PAN requirements to high-value spending and business dealings:

• Cash payments exceeding Rs 1 lakh to hotels, restaurants, banquet halls, convention centres or event managers
• Sale or purchase of goods or services (other than specified transactions) exceeding Rs 2 lakh per transaction

Declaration in Form No. 97 Instead of PAN

Certain individuals (other than companies or firms) without PAN may submit a declaration in Form No. 97 for transactions listed under Sl. No. 11 to 16, detailing transaction particulars.

Additionally, a foreign company transacting with an IFSC banking unit for account opening or time deposits may furnish Form No. 97, provided it has no income chargeable to tax in India.

Mandatory PAN Application in Certain Cases

Under Rule 159(3), individuals without PAN (other than companies or firms) must apply for PAN if they enter into:

• Any transaction listed under Sl. No. 1 to 10, or
• Immovable property transactions exceeding Rs 45 lakh, including stamp valuation cases.

Exemptions Provided Under Rule 159

The following are exempt from PAN quoting requirements:

• Central Government, State Governments and Consular Offices
• Specified non-residents for certain transactions
• Non-residents or foreign companies transacting with IFSC banking units, provided they have no taxable income in India

Minors without taxable income may quote the PAN of a parent or guardian.

Compliance Responsibility on Banks and Intermediaries

Banks, post offices, insurers, intermediaries and other reporting entities must:

• Verify PAN or Form No. 97 declarations
• Maintain accurate transaction records
• Link PAN or declaration details with information shared with the income-tax authorities

The Principal Director General of Income-tax (Systems) is empowered to prescribe authentication formats, standards, and procedures.

Conclusion

Rule 159 of the Draft Income-tax Rules, 2026, significantly expands and clarifies PAN-based compliance for high-value financial, property, and commercial transactions. By defining clear thresholds, exemptions, and reporting obligations, the CBDT aims to curb tax evasion, improve audit trails, and strengthen India’s financial compliance ecosystem ahead of the implementation of the Income-tax Act, 2025.