4 min readNew DelhiFeb 10, 2026 06:42 AM IST
A hike in monetary thresholds for quoting Permanent Account Number (PAN) during purchase of motor vehicles, cash deposits or withdrawals from a bank; a revision in employer-provided perquisites for employees; and inclusion of virtual digital payments such as Central Bank Digital Currency (CBDC) in the non-cash category of transactions — these are some of the key changes proposed in the new Income-tax Rules, 2026.
The Central Board of Direct Taxes (CBDT) has floated the draft rules and forms for public comments in line with the new Income-tax Act, 2025, which will come into effect from April 1. After stakeholders’ feedback, the CBDT is likely to notify the final rules and forms in the first week of March, officials said.
The new I-T rules have specified the list where quoting of PAN will be mandatory: cash deposits or withdrawals aggregating to Rs 10 lakh or more in a financial year, in one or more accounts of a person, will require mandatory quoting of the PAN. At present, PAN is required to be quoted for cash deposits exceeding Rs 50,000 during any one day with a banking company or a co-operative bank. Similarly, the monetary threshold for quoting PAN has been set at Rs 5 lakh in case of purchase of motor vehicles (including motorcycles). Under the current I-T rules, PAN was required to be cited for sale or purchase of a motor vehicle or vehicle, other than two-wheelers.
In the hospitality sector, PAN will be mandatory for hotel or restaurant bills, or convention centres or banquet halls or for payment to a person engaged in event management, for payments over Rs 1 lakh. The existing rules mandate quoting of the PAN for payments exceeding Rs 50,000 in case of hotel or restaurant bills. Also, PAN will be mandatory if the transaction cost is over Rs 20 lakh, nearly double the existing limit of Rs 10 lakh, in case of purchase or sale or gift or joint development agreement of any immovable property.
The draft also proposes raising the value of perquisites provided by employers. Officials said the value of tax-free perquisites for official vehicles and free meals is proposed to be raised in view of the market realities. For free food and non-alcoholic beverages provided by the employer to an employee, the perquisite value has been fixed at Rs 200 per meal. For motor cars, the allowance of cars below the engine capacity of 1.6 litres will be Rs 8,000 per month, while for others it will be Rs 10,000 per month, inclusive of the allowance for drivers.
The draft rules have also expanded the list of Category 1 metropolitan cities to include Bengaluru, Pune, Ahmedabad, and Hyderabad for the purpose of claiming house rent allowance (HRA). Currently, the list includes the four metropolitan cities of Delhi, Mumbai, Kolkata, and Chennai.
On virtual digital assets, the new rules have proposed reporting and due-diligence obligations for crypto-asset service providers. “The information sharing for crypto exchanges are part of the new rules. Actual sharing of information will start in 2027. Once they are notified, then according to the rules and the forms, the crypto exchanges will provide information pertaining to the coming financial year (2026-27) and the exchange will begin in 2027-28,” an official said. Transactions via the Central Bank Digital Currency will also now be part of the list of non-cash transactions as an acceptable mode of electronic payment..
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The draft I-T Rules, 2026 contain 333 rules as against 511 earlier, while the forms have been reduced to 190 from 399 through removal of redundancy and consolidation of rules wherever possible, the CBDT said. The draft rules and forms will be in public domain for a period of 15 days, up to February 22.
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