Draft rules under the Income Tax Act 2025, unveiled by the Central Board of Direct Taxes (CBDT), have laid down thresholds for quoting PAN on transactions pertaining to immovable property, hotel bills, and purchase of two wheelers and four wheelers.

PAN is mandatory for annual cash deposits or withdrawals of over ₹10 lakh. Quoting PAN is mandatory on sale and purchase of immovable property of the price increase ₹20 lakh. On hotel bookings below ₹ one lakh, quoting PAN is not required. 

Similarly, a threshold of ₹5 lakh has been set for quoting PAN at the time for purchase of two wheelers and four wheelers, according to the draft rules under the Act. 

A CBDT source said other changes include addition of Bengaluru, Pune, Ahmedabad, and Hyderabad in the list of metro cities for HRA purposes. 

It may be noted that the Income Tax department will notify the rules and tax return forms under the Income Tax Act, 2025 by the first week of March, said sources. 

Also, all the rules and forms under the Act, which will take effect beginning April 1 this year, will be notified at one go. "Through the new forms, the department aims to capture the data in a manner that auto reconciliation, and AI-enabled analytics are possible, said a source. 

In line with the simplified provisions of the Act, the rules aim at ease of compliance, returns filing and overall processes. The number of rules under the Income Tax Act, 2025 has been brought down to 333 compared with 511 in the Income Tax Rules of 1962. Similarly, the number of forms has also been brought down to 190 in the current statute compared with 399 in the previous law.

It may be noted that last week, the Central Board of Direct Taxes (CBDT) has unveiled the draft income tax (IT) rules and forms under the Act, and has invited suggestions from the stakeholders and public on the same. Tax department has sought suggestions on simplification of language, reduction of litigation, reduction of compliance burden, identification of redundant/obsolete rules and forms.

“The suggestion window is open till February 22nd. The department will need one week to review the suggestions and incorporate the changes suggested. The rules and forms are likely to be notified in the first week of March,” said a CBDT source. 

"The Income-tax Act, 2025 received the assent of the President in August 2025. The Act will come into effect from 1st April 2026. Before final notification of the Income Tax Rules and Forms, to encourage wider stakeholder participation, the proposed Income Tax Rules and Forms have been uploaded on the official website: www.incometaxindia.gov.in,” said a release from the ministry of finance last week. 

“The corresponding Income-tax Rules and related Forms have been prepared after broad-based consultation to align with the provisions of the Income-tax Act, 2025. Stakeholders are encouraged to study the same and make suggestions, which will be compiled and considered for review before final notification,” the ministry said.