New Delhi | The compliance landscape for taxpayers has undergone a significant transformation following the implementation of revised PAN-related and high-value financial transaction rules in 2026. While the updated Income Tax framework has relaxed documentation requirements for certain routine cash transactions and payments, authorities have simultaneously intensified scrutiny over property purchases, large cash deposits, insurance premium payments, and other high-value financial activities. Financial experts warn that even minor discrepancies or reporting lapses may now attract closer examination from the Income Tax Department.
Under the revised structure, the government has replaced the earlier “Form 60” mechanism with a new “Form 97,” aimed at narrowing the scope for conducting major transactions without a Permanent Account Number (PAN). Experts say the move reflects a broader strategy to simplify day-to-day banking procedures while strengthening digital tracking and transparency in wealth creation and asset-linked transactions.
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One of the most notable changes is the relaxation in mandatory PAN disclosure for certain cash deposits. Earlier, depositing more than ₹50,000 in cash in a single day required immediate PAN submission. Under the revised rules, that direct requirement has been removed. However, banks will continue to monitor cumulative annual cash deposits, and transactions crossing the revised threshold of ₹10 lakh annually may still be reported to tax authorities. Previously, the reporting threshold stood at ₹2.5 lakh.
Similarly, the mandatory requirement of furnishing PAN details for cash payments exceeding ₹50,000 towards bank drafts, banker’s cheques, or pay orders in a single day has also been eased. Despite the relaxation, annual transaction monitoring mechanisms remain firmly in place, ensuring that unusual financial patterns can still be flagged for scrutiny.
Changes have also been introduced for overseas travel expenses and foreign currency purchases. Taxpayers will no longer be required to separately provide PAN details while booking international travel packages or purchasing foreign currency, unless the transaction falls under high-value reporting norms. Industry observers believe this may offer procedural relief to middle-class travellers and frequent international commuters.
In another significant revision, the threshold for mandatory PAN disclosure in hotel and restaurant cash payments has been increased from ₹50,000 to ₹1 lakh per transaction. The change is expected to benefit consumers involved in large hospitality payments related to weddings, family functions, and corporate events.
Despite these relaxations, the government has simultaneously expanded the overall surveillance framework for high-value transactions. Tax professionals say authorities are expected to closely track annual cash deposits and withdrawals, property transactions exceeding ₹45 lakh, substantial insurance premium payments, large event-related expenditures, and high-value transactions conducted without PAN details.
Financial institutions, insurers, and other reporting entities are now expected to share transaction data through integrated digital systems, enabling authorities to match and analyze spending patterns more efficiently. According to experts, the Income Tax Department is increasingly relying on data analytics and behavioural profiling rather than examining isolated transactions in silos.
Tax advisors have urged individuals and businesses to maintain systematic records of all major financial dealings, especially those involving cash. Experts caution that taxpayers who regularly engage in high-volume cash transactions should preserve invoices, bank statements, agreements, and supporting documentation to avoid complications during future scrutiny.
Analysts believe the revised rules reflect the government’s attempt to strike a balance between easing routine banking formalities and strengthening oversight over wealth-linked financial activity. While ordinary consumers may experience reduced paperwork in everyday transactions, individuals involved in high-value dealings are likely to face far stricter reporting standards and accountability requirements than before.
