PAN Quoting Rules 2026: New Annual Aggregate Thresholds Explained

Depositing Rs 60,000 cash at a bank counter used to mean pulling out your PAN card every single time. From 01 April 2026, that daily hassle is gone. The Income-tax Rules, 2026 have replaced daily transaction-based PAN quoting with annual aggregate thresholds. You now need PAN only when your cumulative cash transactions cross Rs 10 lakh in a year - not Rs 50,000 in a day.

This guide explains every revised PAN quoting threshold, covers all transaction categories, maps old rules to new rules, and shows you when PAN is required and when it is not.

What Are the PAN Quoting Rules and Why Were They Changed?

PAN quoting rules require individuals and entities to furnish their Permanent Account Number (PAN) when entering into specified high-value financial transactions. Under the old Rule 114B of the Income-tax Rules, 1962, PAN was required for transactions exceeding daily limits (Rs 50,000 cash at a bank counter, Rs 10 lakh property, etc.).

The Income-tax Rules, 2026 (notified by CBDT vide Notification No. 22/2026 dated 20 March 2026) replace Rule 114B with Rules 161 and 162. The fundamental shift is from per-transaction daily limits to annual aggregate thresholds. This leverages the department’s AI-driven data analytics and SFT reporting to monitor patterns rather than individual counter transactions.

For taxpayers filing income tax return filing, PAN remains the central identifier linking all financial transactions to your tax profile. The threshold change reduces friction, not tracking.

Key Terms You Should Know

• Rule 161/162 - IT Rules 2026: The new rules replacing Rule 114B of IT Rules 1962. Prescribe PAN quoting requirements for specified transactions with revised thresholds.
• Section 139A - IT Act 2025: The provision mandating PAN application and quoting in specified transactions. Corresponding to old Section 139A of IT Act 1961.
• Annual Aggregate Threshold: The cumulative total of a specific transaction type across the entire financial year, rather than a per-transaction or per-day limit.
• SFT (Statement of Financial Transactions): Reports filed by banks, registrars, and other entities on high-value transactions. SFT data feeds into your AIS. Even below PAN thresholds, transactions above SFT limits are reported.
• AIS (Annual Information Statement): Your comprehensive financial profile maintained by the Income Tax Department, showing all reported transactions.
• Section 272B - Penalty: Penalty of Rs 10,000 for each instance of failure to quote PAN or quoting incorrect PAN in a specified transaction.

Who Needs to Know the New PAN Quoting Thresholds?

The revised thresholds affect every individual and entity that engages in cash transactions, property deals, vehicle purchases, or high-value spending.

• Salaried individuals and families who deposit or withdraw cash at bank counters
• Small business owners and traders who handle cash daily
• Property buyers and sellers - PAN threshold doubled to Rs 20 lakh
• Vehicle buyers - new coverage of premium two-wheelers above Rs 5 lakh
• Frequent hotel/banquet hall spenders - threshold raised to Rs 1 lakh
• Insurance policyholders - PAN now required for opening any account-based relationship with an insurer
• Mutual fund and FD investors - annual aggregate threshold of Rs 10 lakh

If you need to apply for a new PAN or update your details, explore our PAN registration service.

Complete PAN Quoting Threshold Table: Old vs New Rules from April 2026

Note: The shift from daily to annual aggregate applies to cash transactions, FDs, mutual funds, and bonds. Property and vehicles remain per-transaction. The Rs 10 lakh annual aggregate for cash is cumulative across ALL bank accounts of the person - not per account. Tractors are exempt from the vehicle PAN requirement.

How the New Annual Aggregate System Works: Step-by-Step

1. Track your cumulative cash transactions during the financial year. Every cash deposit and withdrawal at every bank account is counted toward the Rs 10 lakh annual aggregate. Digital transactions (UPI, NEFT, RTGS, card payments) do NOT count.
2. Quote PAN only when the threshold is crossed. If your cumulative cash deposits reach Rs 10 lakh in October, PAN must be quoted for all subsequent cash deposits during that financial year - even if each transaction is small.
3. For per-transaction categories, check each transaction independently. Property (>Rs 20 lakh), vehicles (>Rs 5 lakh), hotels (>Rs 1 lakh), and foreign travel (>Rs 50,000) are still per-transaction. You quote PAN at the time of the specific transaction if it exceeds the threshold.
4. Ensure PAN is linked to Aadhaar. If PAN is not linked to Aadhaar, it becomes inoperative. An inoperative PAN cannot be quoted in transactions, cannot be used for ITR filing, and pending refunds are held. Link before 31 March 2026.
5. Verify your AIS after high-value transactions. Even if PAN is not quoted (because you are below threshold), banks report transactions above Rs 2 lakh to the department via SFT. Check your AIS periodically for accuracy.
6. Keep records for 6 years. Maintain bank statements, property documents, vehicle invoices, and hotel receipts. These are needed if the department queries any transaction that appears in your AIS but was not reported in your ITR.
7. Quote PAN proactively for large transactions. Even if you are below the annual threshold, quoting PAN voluntarily ensures a clean audit trail and avoids future queries.

Documents and Records Needed for PAN Compliance

• PAN card (physical or e-PAN) - linked to Aadhaar
• Bank passbook / statements showing cumulative cash deposits and withdrawals
• Property sale deed / purchase deed with transaction value
• Vehicle purchase invoice with price and buyer details
• Hotel / banquet hall bills exceeding Rs 1 lakh
• Insurance policy documents with premium details
• Mutual fund / FD / bond investment confirmation with amount and date
• Forex purchase receipts / travel agent invoices for foreign travel
• AIS download from e-Filing portal for periodic verification

SFT Reporting: What Banks Track Even Without PAN Quoting

The removal of the daily PAN requirement does NOT mean transactions are invisible. Banks and financial institutions continue to report high-value transactions to the Income Tax Department through the Statement of Financial Transactions (SFT).

Note: SFT data feeds directly into your AIS. The department’s AI compares SFT entries against your declared income in the ITR. Mismatches trigger automated notices. Even if you do not quote PAN at the bank counter, the transaction is tracked through your account number and PAN-Aadhaar linkage.

Common Mistakes to Avoid with PAN Quoting in 2026

Mistake 1: Assuming the Rs 10 lakh cash limit is per bank account. The annual aggregate of Rs 10 lakh applies across ALL bank accounts of the person combined. If you deposit Rs 6 lakh in Account A and Rs 5 lakh in Account B, your total is Rs 11 lakh - PAN is required. Check our capital gains rules for how cash transactions interact with capital gains reporting.

Mistake 2: Not quoting PAN for premium two-wheelers. The new Rs 5 lakh vehicle threshold includes two-wheelers for the first time. Buyers of superbikes (Royal Enfield Super Meteor 650, Kawasaki Ninja, etc.) priced above Rs 5 lakh must quote PAN. Failure attracts Rs 10,000 penalty.

Mistake 3: Not linking PAN to Aadhaar before the deadline. If PAN is not linked to Aadhaar, it becomes inoperative from 01 April 2026. An inoperative PAN means you cannot file ITR, receive refunds, or complete high-value transactions. Link at incometax.gov.in/iec/foportal.

Mistake 4: Ignoring the insurance PAN requirement. Under the new rules, opening any account-based relationship with an insurer requires PAN - not just when premiums exceed Rs 50,000. Even a term insurance policy with Rs 10,000 annual premium now requires PAN at account opening.

Mistake 5: Not checking AIS for reported transactions. Many taxpayers discover SFT-reported transactions only when they receive a notice. Download AIS from the e-Filing portal quarterly and reconcile with your records. For crypto investors, transactions are also tracked - see our crypto ITR guide.

Penalties for Non-Compliance with PAN Quoting Rules

Under Section 272B of the Income Tax Act (corresponding IT Act 2025 provision), a penalty of Rs 10,000 is imposed for each instance of failure to quote PAN or quoting an incorrect PAN in a specified transaction.

Under Section 206AA, if PAN is not quoted in TDS-related transactions, TDS is deducted at the higher of: the prescribed rate, the rate in force, or 20%. This is particularly relevant for property transactions and insurance policy payments.

If PAN is inoperative (not linked to Aadhaar), it is treated as if PAN was not furnished. This triggers higher TDS under Section 206AA, and the person cannot file their ITR or receive pending refunds. The Rs 1,000 fee for late PAN-Aadhaar linkage is separate from the Rs 10,000 penalty under Section 272B.

Banks and financial institutions are also liable if they accept transactions above the threshold without collecting PAN. They may face penalties under the SFT reporting framework.

How PAN Quoting Connects with SFT, AIS, and Tax Assessment

The PAN quoting rules work within a layered compliance ecosystem. Even if PAN is not quoted at the counter (because you are below the threshold), your transactions are tracked through SFT reporting. Banks report all cash deposits above Rs 10 lakh, FDs above Rs 10 lakh, and credit card payments above Rs 10 lakh to the department.

This data populates your AIS, which the department’s AI analyses against your declared income in the ITR. For taxpayers filing income tax return filing, reconciling AIS entries with actual transactions before filing prevents mismatch notices and scrutiny.

The government’s strategy is clear: reduce friction at the point of transaction (higher thresholds, annual aggregates) while strengthening backend surveillance (SFT, AIS, AI analytics). You may not need to show PAN at the bank counter for a Rs 3 lakh deposit, but the bank will still report it if your cumulative deposits cross Rs 10 lakh.

PAN Quoting: Daily Limit vs Annual Aggregate - Practical Comparison

Key Takeaways

The Income-tax Rules, 2026 (Rules 161 and 162) replace the decades-old Rule 114B, shifting PAN quoting from daily per-transaction limits to annual aggregate thresholds for cash deposits (Rs 10 lakh/year), FDs (Rs 10 lakh/year), mutual funds (Rs 10 lakh/year), and bonds (Rs 10 lakh/year).

Property PAN threshold has been doubled from Rs 10 lakh to Rs 20 lakh per transaction, easing compliance for smaller real estate deals.

Motor vehicle PAN rules now cover premium two-wheelers (>Rs 5 lakh) for the first time. Hotel and restaurant PAN threshold has been raised from Rs 50,000 to Rs 1 lakh per bill.

The removal of daily limits does not mean reduced surveillance. Banks continue to report high-value transactions via SFT, and the department’s AI analyses patterns through AIS. Taxpayers must reconcile AIS data with their ITR.

Penalty for non-compliance with PAN quoting is Rs 10,000 per instance under Section 272B. PAN-Aadhaar linkage remains mandatory - an inoperative PAN triggers higher TDS at 20% and blocks ITR filing and refunds.

Need Help with PAN Compliance and Tax Filing?

The new annual aggregate thresholds simplify day-to-day banking, but the backend surveillance through SFT and AIS means accurate ITR filing is more important than ever. Whether you need to reconcile AIS data, handle a mismatch notice, or ensure all high-value transactions are correctly reported, professional guidance prevents costly errors.

Explore our ITR filing for expert assistance with PAN compliance, AIS reconciliation, and income tax return filing under the new IT Act 2025.

For queries, reach out at +91 945 945 6700 or WhatsApp us directly.