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Cash transactions of ₹20 lakh or more: Who must quote PAN under new 2026 Rules?
So the taxman is tightening the leash on big spenders again. Rule 161 of the Draft Income Tax Rules 2026 targets high-value paper trails. The goal? Transparency. In fact, the government wants every major rupee accounted for to kill tax evasion. Plus, the Street is already buzzing about the change.
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New Limits for Cash Deposits
But here is the main trigger. You must quote your PAN for cash deposits of ₹20 lakh or more. Is it annual? Yes. And this cumulative limit applies across one or more accounts in a single financial year. Consequently, banks will now watch every single note.
Moreover, the rules changed for withdrawals too. Now, taking out ₹20 lakh in cash triggers the same PAN requirement. Previously, some loopholes remained. So the Post Master General and cooperative banks must now verify your identity. There is no hiding from the system.
Banking and Account Opening Rules
Still, opening a new account has its own hurdles. You need a PAN just to start a current or cash credit account. The process? Mandatory. And the responsibility for authentication lies solely with the banking institutions. Therefore, they must verify your data instantly.
But some people get a free pass. Specifically, the Central and State Governments are exempt from these reporting rules. Why? Sovereign immunity. Plus, consular offices do not need to provide a PAN for their official transactions. Essentially, they operate outside these specific draft constraints.
Exemptions for Global Players
Then there is the offshore exception. Non-residents using IFSC banking units might avoid the PAN trap entirely. The condition? No Indian taxable income. And foreign companies enjoy this same luxury if they stay within the IFSC zone. Indeed, it keeps the “Gift City” attractive.
Worth noting: The Principal Director General of Income-tax (Systems) handles all back-end authentication. They track the digital fingerprints of your cash. So if you plan on moving 50 grand or more in heavy bags, have your card ready. Ultimately, the tax office is definitely watching.
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Quick Guide: PAN Requirements for Large Transactions (2026 Rules)
Frequently Asked Questions (FAQs)
Do I need a PAN for cash transactions of ₹20 lakh or more? So the answer is a firm yes under the Draft Income Tax Rules 2026. You must provide your PAN for both deposits and withdrawals that hit this specific limit.
Who is exempt from quoting PAN for large cash transactions? In fact, the government provides clear exceptions for the Central Government, State Governments, and Consular Offices. Additionally, certain non-residents operating through IFSC units are also exempt.
What happens if I deposit ₹30 lakh without a PAN? But the bank will simply block the transaction. They are legally required to authenticate your PAN before processing any amount over the ₹20 lakh threshold.
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