Income Tax Draft Rules 2026: In order to ease compliance norms, the income tax department has proposed to allow cash withdrawal and deposits of up to Rs 10 lakh in a financial year without the requirement of a Permanent Account Number (PAN).
Currently, a PAN card is required for any cash deposits above Rs 50,000 in a day under Rule 114B of the Income Tax Act, 1961. On withdrawals, no specific aggregate annual limit is prescribed under the existing income tax rules.
The new Income Tax Act, 2025, is set to be implemented from April 1. The Income Tax Draft Rules 2026, which are currently under public review till February 22, are part of this new law.
Cash Deposit Rules Under Income Tax Draft Rules 2026
According to Rule 159 (Table Sl. No.6) of the draft rules, “Every person shall quote his Permanent Account Number in all documents pertaining to the transactions specified… Cash deposits aggregating to Rs 10 lakh or more in a financial year, in one or more accounts of a person."
So, the rules take into account transactions in all your accounts in a financial year and the aggregate limit is Rs 10 lakh.
Cash Withdrawal Rules Under Income Tax Draft Rules 2026
On withdrawals also, the rules are the same. According to Rule 159 (Table Sl. No. 7) of the Income Tax Draft Rules 2026, “Withdrawal with a banking company or a co-operative bank… or Post Office shall require PAN where aggregate withdrawals reach Rs 10 lakh or more in a financial year."
In simple words, if your total cash transactions in a year remain under Rs 10 lakh, banks might not ask for PAN details, reducing paperwork and compliance burden for people.
Apart from cash deposits and withdrawals in banks, PAN-quoting requirements have also been revised in other transactions. PAN is now required for the purchase of vehicles and motorcycles above Rs 5 lakh (earlier PAN was needed for all vehicles except two-wheelers), and immovable property transactions exceeding Rs 20 lakh (against Rs 10 lakh earlier).
Under the draft rules, PAN is no longer required for hotel bills below Rs 1 lakh, compared with Rs 50,000 earlier. PAN has also been made mandatory for account-based relationships with insurance companies.
