Summary of this article
New income tax rules mandate PAN to be produce for several transactions
Form 97 has replaced Form 60, narrowing scope of transacting without PAN
India’s tax framework has undergone a significant overhaul with the introduction of the Income Tax Rules, 2026, which bring stricter requirements, such as mandating a Permanent Account Number (PAN) in certain financial transactions. A major change is the replacement of the long-used Form 60 with the newly introduced Form 97, aimed at streamlining processes to digital reporting norms.
Under the revised rules, PAN continues to remain a critical document for financial dealings, especially high-value transactions. While Form 97 can be submitted by individuals who do not possess a PAN, it does not act as a substitute in several key cases where PAN is now strictly mandatory.
Form 97 will give you a pre-filled form introduced as a declaration form for individuals who do not have a PAN but still need to undertake certain financial transactions, especially high-value ones. It must be submitted at the time of the transaction and includes details such as the individual’s name, address, and nature of the transaction. Entities receiving this form are required to report such transactions to the Income Tax (I-T) department. However, unlike the earlier tax regime, where Form 60 was widely accepted, the scope of Form 97 is more limited under the new rules.
Transactions where PAN is Mandatory
The updated framework makes PAN compulsory for a range of high-value and sensitive financial transactions. In many of these cases, Form 97 cannot be used as a substitute. These include the purchase of high-value goods such as gold jewellery exceeding Rs. 2 lakh, buying vehicles or other assets above specified thresholds. Along with these, PAN has also been made mandatory in opening a demat account or investing in securities, property transactions above prescribed limits, large cash deposits or withdrawals (such as Rs. 10 lakh in a financial year), payments for hotels, events, or services above certain limits.
Additionally, norms around financial transparency have also been made stricter, ensuring that PAN is used for transactions where tracking and reporting are crucial.
Form 97 is not a Workaround
The new tax rules clarify that Form 97 cannot be used to bypass PAN requirements in high-value transactions. In such cases, if an individual does not have a PAN, the transaction may simply not be permitted. This marks a shift from the earlier system, where Form 60 provided broader flexibility for non-PAN holders. The changes are part of the government’s broader effort to curb tax evasion, improve traceability of financial transactions, and strengthen reporting mechanisms.
