The Income Tax Department is planning a big relief for people who deal in cash.
Under the proposed rules, you may soon be able to deposit or withdraw up to Rs 10 lakh in a financial year without giving your Permanent Account Number (PAN).
The change is part of the upcoming Income Tax Act, 2025, which will take effect from April 1.
The related Income Tax Draft Rules 2026 are currently open for public review until February 22.
Right now, the rules are stricter. Under Rule 114B of the Income Tax Act, 1961, you must provide your PAN if you deposit more than Rs 50,000 in cash in a single day.
Cash Deposit Rules: What May Change?
According to the draft rules, PAN will be required only if your total cash deposits cross Rs 10 lakh in a financial year.
This limit will apply to all your bank accounts combined, not just one.
So, if your total cash deposits across different accounts stay below Rs 10 lakh in a year, you may not have to quote your PAN.
This is expected to reduce paperwork and make things easier for small traders, salaried individuals, and others who occasionally deal in cash.
Cash Withdrawal Rules: Same Limit Applies
The same Rs 10 lakh annual limit will apply to cash withdrawals.
If your total cash withdrawals from banks, co-operative banks, or post offices remain below Rs 10 lakh in a financial year, PAN may not be required.
In simple terms, as long as your total cash transactions — deposits or withdrawals — stay under Rs 10 lakh a year, compliance could become much simpler.
Other Important PAN Rule Changes
The draft rules also revise PAN requirements for other major transactions.
Buying a vehicle or motorcycle worth more than Rs 5 lakh will now require PAN.
Earlier, PAN was needed for most vehicles except two-wheelers.
For property deals, PAN will be mandatory only if the transaction value exceeds Rs 20 lakh.
Earlier, the limit was Rs 10 lakh.
There is also relief for hotel bills.
PAN will not be required for bills below Rs 1 lakh, compared to the earlier threshold of Rs 50,000.
However, PAN will now be compulsory for account-based relationships with insurance companies.
If approved, these changes could simplify compliance for many taxpayers while still keeping track of high-value transactions.
