India’s Financial System Enters New Era Of Transparency With PAN At The Core Of Compliance

WOWLY- Your AI Agent May 03, 2026 300 Views

Starting April 1, 2026, quoting a Permanent Account Number (PAN) has become mandatory for a wide range of high-value financial transactions in India. Form 60 has been replaced by Form 97, which has a narrower scope, making PAN compulsory for most purchases, investments, and banking activities.

The Income Tax Act, 2025, effective from April 1, 2026, has tightened compliance rules by expanding the list of transactions requiring PAN. Earlier, individuals without PAN could use Form 60 as a declaration. Now, Form 97 has replaced it, but its applicability is limited, pushing more transactions into the mandatory PAN category.

Why The Change Matters

Form 97 is designed to streamline compliance with pre-filled, tech-enabled formats, reducing manual errors. However, unlike Form 60, it applies to fewer cases, signaling the government’s intent to eliminate transaction anonymity and strengthen financial transparency. Experts note that this shift will make it harder to conduct high-value transactions without a PAN.

Major Transactions Requiring PAN

Opening bank accounts and demat accounts
Cash purchases above ₹2 lakh per transaction, including jewelry, gold, and travel bookings
Purchase or sale of real estate worth ₹45 lakh and above (Form 97 applies for ₹20-45 lakh transactions)
Applying for credit cards and availing loans
Cash payments exceeding ₹1 lakh to hotels, restaurants, or event managers
Fixed deposits and insurance policies with annual premiums of ₹50,000 or more
Investments in securities, mutual funds, debentures, and bonds above ₹50,000
Purchase of motor vehicles above ₹5 lakh
Cash deposits or withdrawals exceeding ₹10 lakh in a financial year
Buying or selling securities and unlisted shares above ₹1 lakh per transaction

Scope Of Form 97

Form 97 can still be used by individuals without PAN for limited transactions, such as property deals between ₹20–45 lakh or certain account openings. However, minors must quote their parent’s PAN, and foreign companies operating through IFSC units may use Form 97 if they have no taxable income in India.

Key Highlights

PAN mandatory for most high-value transactions from April 1, 2026
Form 97 replaces Form 60 but applies to fewer cases
Real estate, jewelry, vehicle purchases, and investments now strictly require PAN
Cash deposits/withdrawals above ₹10 lakh linked directly to PAN
Move aims to reduce anonymity and strengthen financial transparency

Sources: Mint, NewsBytes, Moneycontrol, The Economic Times, Times of India

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