The central government is going to make major changes in the direction of simplifying the income tax system. In fact, the Finance Ministry has released the draft of Income Tax Draft Rule 2026, in which it is proposed to relax the rules related to PAN card. This will have a direct impact on the everyday transactions of common people related to banking, shopping and services. If these rules are implemented then the compulsion to show PAN card again and again on small transactions will end.

There will be big relief in bank transactions

Actually, till now the rule was that if a person deposits more than Rs 50 thousand in cash in a single day, then it is necessary to give PAN. But there is a proposal to change this system in the new draft rules. Now, PAN card will be mandatory only if there is a total cash deposit or withdrawal of Rs 10 lakh or more in one or more bank accounts in the entire financial year. This means that those doing small cash transactions can get big relief.

PAN card rules will change even after buying a car

At present, it is mandatory to give PAN card for purchasing any motor vehicle of any value, whereas two-wheeler is out of this scope, but according to the new rules, PAN card will have to be given only if the price of both two-wheeler and four-wheeler is more than Rs. 5 lakh. PAN card will not be mandatory if you buy a car worth less than Rs 5 lakh.

Deal on hotel, restaurant and event expenses also

It has also been proposed to provide relief in expenses related to hospitality and event management sector. At present, it is mandatory to show PAN card on hotel or restaurant bills of more than Rs 50 thousand. In the draft rules, it has been said that this limit will be increased to one lakh. The same rule will also apply to banquet halls, convention centers and event management services. Apart from this, changes are also proposed in transactions related to real estate. At present, it is mandatory to provide PAN on property deals worth more than Rs 10 lakh. But in the new rules, there is a proposal to increase this limit to Rs 20 lakh, that is, PAN will not be mandatory for deals less than Rs 20 lakh.

When will the new rules come into effect?

According to the report, the government and CBDT will take opinion of stakeholders on these draft rules. After this, they can be finalized and notified by the first week of March 2026. The new rules are likely to come into effect from April 1, 2026, and will replace the old income tax rules of 1962.

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HRA Tax New Rules: The government may soon announce relief for employees working in major cities of the country. The Central Government is planning to change the rules of tax exemption on House Rent Allowance (HRA).

Keeping in mind the ever increasing house rents, the government can change the rules. Under the Draft Income Tax Rules 2026, it has been proposed that some new cities should also be included in the ambit of higher HRA exemption. Till now this facility is limited to only four metro cities Mumbai, Delhi, Kolkata and Chennai…

Which cities are proposed to be connected?

The government’s proposal calls for adding Bengaluru, Hyderabad, Pune and Ahmedabad among the cities with 50 percent relaxation. Currently, 40 percent discount is available in these cities as per the old fixed limit.

How will the employees benefit from the proposal?

Under current income tax rules, three different figures are compared to decide tax exemption on HRA. The discount is available only on the one which is lowest among these. One of these is the actual HRA received by the employee. On the other hand, for those working in metro cities, the basic salary and DA is 50 percent (40 percent in other cities). Thirdly, it is the amount left after deducting 10 percent of basic salary and DA from the fare paid.

If these proposed rules are implemented, then those working in big cities like Bengaluru, Hyderabad, Pune and Ahmedabad will also get the benefit of more tax exemption. With this, these cities will come in the category of metros like Mumbai, Delhi, Kolkata and Chennai in terms of HRA.

Discussion on draft ongoing, decision yet to be taken

At present the government has presented this proposal in draft form. A final decision on this will be taken only after receiving suggestions and objections from all parties. If the rules are implemented, employed people living in expensive cities are expected to get significant tax relief.

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