income tax rule
After the implementation of Income Tax Act, 2025 and Income Tax Rules, 2026, PAN (Permanent Account Number) has now been made mandatory in major financial transactions. Earlier, people who did not have PAN used to manage by filling Form 60, but now Form 97 has come in its place. However, there are many important transactions where even Form 97 will not be valid and PAN will have to be given directly.
Easy process, less disputes
The new Form 97 and Form 98 have been prepared in easy language and pre-filled format. Also, efforts have been made to reduce mistakes and disputes by increasing the use of technology. The tax department says that these changes will make compliance easier and the number of forms filled will reduce by 80-85%.
PAN required for purchases above Rs 2 lakh
According to Chartered Accountant Suresh Surana, under the new rules, it is mandatory to provide PAN on the purchase of any goods or services worth more than Rs 2 lakh. This also includes high-value purchases like gold jewellery. That means if you buy gold jewelery worth more than Rs 2 lakh, the deal will not be possible without PAN.
PAN is mandatory in these transactions
The government has decided on some transactions where even the facility of Form 97 will not be provided. These include purchase of a vehicle worth more than Rs 5 lakh, application for a credit card, opening a demat account, investment in mutual funds or bonds of more than Rs 50,000. Apart from this, PAN will also be required for cash deposit or withdrawal of more than Rs 10 lakh, security transactions of more than Rs 1 lakh and purchase and sale of unlisted shares.
Use of Form 97 limited
After the new rules, the use of Form 97 has become quite limited. Earlier, where around 12 crore Form 60 were filled every year, now its number is estimated to come down to around 2 crore. The government has excluded small and low-risk transactions from reporting, reducing the need to fill forms.
In some cases the need for the form is eliminated
In the new rules, transactions related to foreign exchange purchases, cash purchases of bank drafts or pay orders and prepaid payment instruments have been taken out of the scope of Form 97.
what is its effect
The purpose of these changes is to make the tax system more transparent and to stop fraudulent transactions. Now it is clear that most of the major financial works will not be possible without PAN, which will make tax tracking even stronger.
