NEW DELHI: The draft Income Tax rules that propose to bring sweeping changes ranging from simplified, smart pre-filled forms, to new limits for PAN quoting for transactions such as payment of hotel bills and buying insurance, will come into effect from April 1.
The draft rules, after incorporating public comments, will be notified by the first week of March, and will replace the Income Tax Rules 1962.
The new rules will give effect to the new Income Tax Act, 2025, which will be implemented from April 1.
Following are the salient features of the draft Income Tax Rules, 2026:
* Number of Rules slashed to 333 from 511; forms to 190 from 399
* PAN mandatory for annual cash deposits/withdrawals exceeding Rs 10 lakh
* No need to quote PAN for hotel bills below Rs 1 lakh
* Rs 5 lakh threshold for quoting PAN for purchase of vehicles, motorcycles
* For immovable property, quoting PAN mandatory if price exceeds Rs 20 lakh
* PAN compulsory for account-based relationship with an insurance company
* Value of tax-free perquisites, like official vehicles and free meals, raised
* Bengaluru, Pune, Ahmedabad, Hyderabad added to list of metro cities for HRA purpose
* Crypto exchanges to share information with tax department
* Central Bank Digital Currency (CBDC) to be accepted mode of electronic payment.