PAN now mandatory for these financial transactions in India
What's the story
The Indian government has made it mandatory to quote a Permanent Account Number (PAN) for several financial transactions. The change, which is effective from April 1, 2026, is part of the Income Tax Act of 2025. The new rule replaces the earlier practice where individuals without a PAN could use Form 60 as a declaration. Now, Form 97 is used instead to simplify compliance and reporting processes.
New form
Form 97 replaces Form 60
Form 97 is a more structured and technology-driven format, with pre-filled details to minimize manual errors. However, its applicability has narrowed down as a wider range of high-value transactions now require PAN to be quoted directly. Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited, said, "Form 97 is an effort to reduce the reporting of non-anonymous transactions with an aim to gradually eliminate transaction anonymity in finance."
New requirements
Transactions requiring PAN
Due to the recent regulatory changes, several transactions that previously required only Form 60 will now require a PAN. These include opening bank and demat accounts, cash purchases over ₹2 lakh per transaction (including jewelry and travel), real estate transactions worth ₹45 lakh and above (Form 97 for ₹20 lakh to 45 lakh), applying for credit cards or loans, and cash payments exceeding ₹1 lakh to hotels/restaurants/event managers.
Additional requirements
Other transactions needing PAN
The new rules also mandate PAN for opening fixed deposits and insurance policies with an annual premium of ₹50,000 or more. Investments in securities, mutual funds, and bonds above prescribed limits will also require a PAN. Nishant Shanker, tax strategy expert and former senior manager of tax at EY said, "The objective is to minimize anonymous participation in the financial system."
Possible exemptions
Exemptions or alternatives in certain cases
Despite the stringent regulations post-update, experts say there could be some exemptions or alternatives in certain cases. Maurya said, "Persons having applied for a PAN but not received it may be allowed to submit the acknowledgement receipt for the time being." He also suggested that Aadhaar may be accepted as an illustrative document in some government-related or low-risk cases. Non-residents could submit passport particulars or prescribed documents of identification as per certain guidelines.