If you happen to often deal in money transactions, purchase property or autos, or declare home lease allowance (HRA), the proposed Earnings Tax Guidelines, 2026 may change among the compliance necessities for you from April this 12 months.
The Central Board of Direct Taxes (CBDT) has proposed a number of updates to PAN-quoting thresholds, worker advantages valuation, and reporting guidelines as a part of the transition to the Earnings Tax Act, 2025, which is scheduled to take impact on April 1.
The foundations shall be finalised after stakeholder session.
PAN guidelines for financial institution transactions could change
One of many greatest proposed adjustments pertains to money deposits and withdrawals.
Underneath the draft guidelines:
PAN shall be required for money deposits or withdrawals totalling ₹10 lakh or extra in a monetary 12 months throughout a number of financial institution accounts.
At present, PAN is required just for money deposits above ₹50,000 in a single day with a financial institution or cooperative financial institution.
For many salaried taxpayers, this implies fewer PAN-related compliance triggers for routine banking transactions, whereas nonetheless monitoring large-value exercise.
PAN requirement for purchases and funds
The draft guidelines additionally revise PAN-quoting necessities throughout a number of transactions:
Motorcar purchases: PAN required if worth exceeds ₹5 lakh, together with two-wheelers.
Resort, banquet or occasion funds: PAN required for funds above ₹1 lakh (earlier ₹50,000).
Property transactions: PAN required for transactions above ₹20 lakh (earlier ₹10 lakh).
Insurance coverage relationships: PAN required when beginning an account-based relationship with an insurer.
The present Earnings Tax Guidelines, 1962, don’t present for quoting of PAN for buy of two-wheelers, whereas for motor autos it was obligatory regardless of value.
In case of lodge/restaurant payments, funds made to conference centres or banquet halls or an individual engaged in occasion administration, PAN shall be obligatory if the fee exceeds Rs 1 lakh.
The present I-T Guidelines specify a Rs 50,000 threshold for quoting PAN in case of lodge/restaurant payments.
HRA guidelines increase to extra cities
For salaried staff claiming home lease allowance (HRA), the draft guidelines increase the record of Class-1 metro cities.
Along with Delhi, Mumbai, Kolkata and Chennai, the record could now embody:
-
Bengaluru -
Pune -
Ahmedabad -
Hyderabad
This might have an effect on how HRA exemptions are calculated for workers dwelling in these cities.
Adjustments in worker perquisites
The draft guidelines additionally suggest updates to the valuation of sure tax-free perquisites supplied by employers.
For instance:
Free meals supplied by employers could also be valued at ₹200 per meal.
Firm automobile allowances could also be valued at ₹8,000 per thirty days for smaller vehicles and ₹10,000 per thirty days for bigger autos, together with driver prices.
These revisions replicate present market prices and inflation, aligning tax guidelines with real-world bills.
Crypto reporting and digital funds
The draft guidelines suggest obligatory reporting obligations for crypto exchanges, requiring them to share transaction data with the tax division.
The foundations additionally recognise Central Financial institution Digital Forex (CBDC) as an accepted mode of digital fee, signalling the rising position of digital cash in India’s monetary system.
What taxpayers ought to count on
The proposed adjustments are a part of the federal government’s broader effort to simplify compliance and modernise tax administration below the brand new tax legislation framework.
For many taxpayers, the adjustments imply:
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fewer PAN necessities for smaller transactions -
clearer guidelines for worker advantages -
expanded HRA classification for main cities -
tighter reporting for digital belongings
The ultimate guidelines are anticipated to be notified by early March, forward of the brand new tax regime’s rollout in April.
With inputs from PTI
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