The new Income Tax Act, 2025, will replace the old Income Tax Act effective from April 1, 2026, introducing a series of reforms aimed at enhancing compliance and transparency in financial transactions.
Among the key changes, two-factor authentication will now be required for all digital payment transactions in India. This move is expected to bolster security and reduce fraud in online financial dealings.
In a significant shift, Aadhaar alone will no longer suffice for obtaining a Permanent Account Number (PAN) card; applicants will need to provide additional documents. Furthermore, the name on the PAN card must match the details on the Aadhaar card, ensuring consistency in identification.
Individuals applying for a PAN will now use Form 93, while companies will use Form 94. Foreign individuals and entities will need to fill out Forms 95 and 96, respectively, reflecting a more structured approach to PAN applications.
Additionally, the requirements for PAN usage in various financial transactions have been updated. PAN will be required for banking transactions only when total deposits or withdrawals exceed Rs 10 lakh in a financial year, and for vehicle purchases when the value exceeds Rs 5 lakh.
Insurance policies will also require a PAN at the start of every policy, regardless of the premium amount, with a threshold of Rs 50,000 for annual premiums. This marks a significant change in how insurance transactions are monitored.
Moreover, the threshold for mandatory PAN disclosure in property transactions has increased from Rs 10 lakh to Rs 20 lakh, while for high-value spending at hotels, restaurants, or events, PAN will only be required when the bill exceeds Rs 1 lakh.
Rohit Mahajan, a financial expert, commented, “These changes aim to streamline tracking of financial activities and strengthen the linkage between individuals and their transactions.” This reflects a broader effort to enhance the integrity of financial systems in India.
As these reforms take effect, observers expect a more transparent financial environment, although details remain unconfirmed regarding the full implementation process.
In a related event, the Junior Pan American Cups 2026 will take place in Santiago, Chile from April 6-18, 2026, showcasing the importance of the term ‘PAN’ in various contexts.
