Sweeping Changes in Income Tax Rules: PAN to Play a Key Role
The draft Income Tax Rules propose raising transaction limits for quoting PAN on various financial activities, including cash transactions, vehicle purchases, and property dealings. They also involve new reporting requirements for crypto transactions and recognize Central Bank Digital Currency as a payment method. These measures aim to improve tax compliance.
- Country:
- India
The proposed draft of the Income Tax Rules suggests significant changes in the criteria for quoting Permanent Account Number (PAN) for numerous transactions, including cash deposits, vehicle purchases, and property dealings.
New mandates include making PAN compulsory for transactions exceeding Rs 10 lakh in cash deposits and withdrawals annually, and purchases over Rs 5 lakh in the context of motor vehicles, inclusive of two-wheelers. This reflects a strategy to capture precise financial data and enhance compliance with the Income Tax Act, 2025.
Furthermore, crypto exchanges will be required to report transactions to the tax department, while Central Bank Digital Currency is acknowledged as an electronic payment mode. These amendments are part of a broader push to integrate technology within tax-reporting frameworks, aligning them with the present market conditions and financial realities.
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