With effect from April 1, 2026, changes under the Income Tax Act, 2025 have expanded the list of financial transactions where quoting a PAN is mandatory. Earlier, individuals without a PAN could Form 60 as a declaration. This has now been replaced by Form 97, which is designed to streamline the process and align it with digital reporting requirements.
The new form introduces a more structure and technology-driven format, with pre-filled details aimed at minimising manual errors. At the same time, its applicability has narrowed, as a larger set of high-value transactions now require to be quoted directly.
“Form 97 is in contrast to Form 60 in that it is designed from a compliance and reporting perspective. Form 97 is an effort to reduce the reporting of non-anonymous transactions with an aim to gradually eliminate transaction anonymity in finance,” said Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited.
Which transactions mandatorily require PAN?
Due to recent changes in regulations, multiple transactions that would have historically required only a Form 60, will now mandatorily require a PAN. These transactions include:
- Opening accounts: PAN mandatory for opening bank accounts and demat accounts.
- High-value cash purchases: Required for cash purchases above ₹2 lakh per transaction, such as jewelry, and even .
- Purchase or sale of real estate: Pan is mandatory for transactions of ₹45 lakh and above. Form 97 may be used for ₹20 lakh to 45 lakh.
- Credit and loans: required for applying for credit cards and availing loans,
- Hospitality and events: Mandatory for cash payments exceeding ₹1 lakh to hotels, restaurants or event managers.
- Banking and insurance: Required for opening fixed deposits, as well as insurance where annual premium is ₹50,000 or more.
- Investments: Required for investments in securities, mutual funds and bonds above prescribed limits.
“The objective is to minimise anonymous participation in the financial system. It is also important to recognise that most transactions routed through the banking system are already visible to the Govt. through reporting frameworks and are increasingly correlated with PAN and Aadhaar,” said Nishant Shanker, a tax strategy expert and former senior manager of tax at EY.
Individuals must note that regulators have, and are still, expanding the category of transactions that require a PAN in line with the changing financial transactions ADAP. “In addition to the high-value transactions, there is a lot of focus on the large digital transactions, e-commerce seller registrations and payouts, high-value insurance premium payments, and foreign remittances under the LRS. This is in line with the changing financial transactions in the economy,” Maurya said.
Are there any exceptions?
Although regulations may be stringent after the update, there may be some exemptions or alternatives allowed in certain cases, according to experts.
“Persons having applied for a PAN but not received it, may be allowed to submit the acknowledgement receipt for the time being,” Maurya said, adding that in some government-related or low-risk cases, Aadhaar may be accepted as an illustrative document.
Meanwhile, non-residents may opt to submit passport particulars or documents of identification as prescribed for certain cases, he said. “These may be exceptions in some cases, and in all other scenarios, it may be possible to conclude that the PAN may be used as the most preferred and acceptable document of identification for the time being for most of the financial transactions in India.”
How will it impact people in semi-urban or rural areas?
This change may affect people in semi-urban and rural areas without a Personal Account Number (PAN), and where adoption level is expected to be low, according to Maurya. “Those who relied on the Form 60 will now experience a cash crunch as they will not be able to execute financial transactions.”
However, getting a PAN has been made a lot easier in the last couple of years, where applicants are able to receive their PAN by doing an online Aadhaar e-. According to Maurya, there is a high likelihood that such people will receive help from banks, common service centers, and other people in the locality.
“With increased emphasis on PAN based tracking, access to certain financial transactions may become more compliance driven, and financial institutions may adopt a more cautious approach. Hence, the practical solution is to obtain a PAN and ensure Aadhaar linkage, as the system is increasingly designed around unified identification. The government has also streamlined PAN issuance processes, making access easier even in semi-urban and rural areas,” Shanker said.