Last Updated:
Previously, PAN was mandatory for cash withdrawals or deposits above Rs 50,000, but now PAN will be required only if the total cash transaction exceeds Rs 10 lakh in a year
Buyers will not need to provide PAN details when purchasing a car or bike costing less than Rs 5 lakh.
As February draws to a close and the new financial year approaches, several changes related to personal finance are set to come into effect from April 1, 2026, under the new Income Tax Act, 2025. The revised rules will impact income tax provisions, PAN card requirements, investments, TDS/TCS regulations and company-related compliance. The changes are expected to affect salaried individuals, investors, business owners and companies across the country.
One of the most significant changes concerns the use of PAN. Earlier, PAN details were required for many small financial transactions. Under the new rules, the limit for providing PAN in cash transactions at banks and post offices has been relaxed. Previously, PAN was mandatory for cash withdrawals or deposits above Rs 50,000, but now PAN will be required only if the total cash transaction exceeds Rs 10 lakh in a year.
Similarly, the threshold for furnishing PAN for high-value spending at hotels, restaurants and functions has been increased. Earlier, PAN was required for bills above Rs 50,000. From April 1, 2026, PAN will be needed only when the bill exceeds Rs 1 lakh.
The rules have also been relaxed for vehicle purchases. Buyers will not need to provide PAN details when purchasing a car or bike costing less than Rs 5 lakh. Earlier, PAN was required even for smaller vehicle purchases, making the process more cumbersome.
Property transaction norms have also been revised. PAN will now be required only for property deals above Rs 20 lakh, compared to the earlier threshold of Rs 10 lakh. This is expected to benefit buyers of lower-cost homes and small properties. In another important change, purchasing property from Non-Resident Indians will become simpler. Buyers will no longer need to obtain a TAN number for TDS deduction and can instead use their PAN, reducing paperwork and making cross-border transactions faster.
Insurance-related rules, however, have been tightened. PAN details will now be mandatory for every insurance policy purchase, regardless of the premium amount. Earlier, PAN was required only for high-value policies.
In a relief measure, interest received on compensation awarded by the Motor Accident Claims Tribunal will be fully tax-free from April 1, 2026. Previously, tax and TDS were sometimes deducted from such interest, reducing the amount received by victims.
There are also notable changes in tax exemptions related to children’s education. The existing exemption of Rs 100 per month per child under the education allowance will be increased to Rs 3,000 per month per child. The exemption will continue to be available for up to two children. Similarly, the hostel allowance exemption will be increased from Rs 300 per month to Rs 9,000 per month per child. These benefits will apply only to taxpayers who opt for the old tax regime.
Tax administration is also set to become more digital, with tax notices expected to be sent through mobile applications along with reminders to ensure timely responses. Failure to link PAN with Aadhaar may also have consequences under the revised compliance framework.
Changes have also been announced in the taxation of share buybacks. Until now, income received from share buybacks was treated as dividend income and taxed according to the individual’s income tax slab. From April 1, 2026, such earnings will be treated as capital gains. Tax will be calculated based on the purchase price and the holding period of the shares, similar to regular share transactions.
Market participants will also see higher trading costs. The Securities Transaction Tax on futures trading has been increased from 0.02% to 0.05% in Budget 2026. For options trading, STT on option premiums has been raised from 0.10% to 0.15%, while the tax on exercised options will increase from 0.125% to 0.15%. The move is aimed at curbing excessive speculation as derivatives trading volumes continue to grow rapidly in India.
Another key change relates to income tax return filing deadlines. Businesses and professionals not requiring audit, along with trusts, will now be able to file their returns by August 31 instead of July 31. This will provide additional time to small traders, professionals such as doctors and chartered accountants, and partnership firms where audit is not mandatory. The revised deadline will apply from the financial year 2025-26 (assessment year 2026-27). However, salaried individuals and those filing ITR-1 and ITR-2 will still need to submit their returns by July 31.
Click here to add News18 as your preferred news source on Google.
February 18, 2026, 19:23 IST
Read More
