PAN is Now Mandatory for These Transactions: Everything You Need to Know After Form 97 Replaced Form 60

India's tax rules saw a meaningful shift from April 1, 2026, when the Income Tax Act, 2025 came into force. Among the changes that directly affect ordinary citizens, two stand out: PAN has been made mandatory for a wider set of financial transactions, and the familiar Form 60 has been replaced by a new Form 97. 

Whether you're planning a big purchase, opening a bank account, or just trying to stay on the right side of compliance, here's a clear-headed breakdown of what's changed and what it means for you.

What Changed on April 1, 2026 and Why Does It Matter?

The Income Tax Act, 2025 officially replaced the Income Tax Act, 1961, bringing with it a fresh set of rules around financial reporting and compliance. For most people, the most noticeable shift is the replacement of Form 60 with the newly introduced Form 97. Alongside this, PAN has been made compulsory for a much wider range of high-value transactions — including several that previously allowed individuals to simply submit Form 60 and proceed.

The intent behind these changes is straightforward: reduce anonymous transactions, bring more activity into the formal financial system, and align India's compliance framework with modern digital reporting standards. It's a step toward a more traceable, accountable financial ecosystem — one where large transactions leave a clear paper trail.

Form 60 vs. Form 97 — What's the Difference?

Form 60 has been around for years as a practical option for individuals without a PAN who still needed to carry out certain financial transactions. It served a genuine purpose, particularly for those in segments of the population where PAN adoption was limited.

Form 97, however, is not just Form 60 with a new number. It's a structurally different document — one built with digital reporting in mind. It features pre-filled information to minimise errors, and its scope is considerably narrower than its predecessor. Where Form 60 was accepted across a broad range of situations, Form 97 can only be used in a specific, limited set of transactions — those where PAN is not yet strictly required. For most high-value dealings, Form 97 cannot be submitted in place of a PAN.

Introduced alongside Form 97 is Form 98, which must be filed by the entities that receive Form 97 declarations — banks, jewellers, real estate agents, and others — so that the Income Tax Department has visibility at both ends of the transaction.

What is the List of Transactions Where PAN is Mandatory? 

Here's a category-wise look at where quoting your PAN has become compulsory:

1. Banking and Investments

• Opening any bank account — savings, current, or otherwise
• Opening a Demat account or investing in securities
• Opening a Fixed Deposit (FD) account

2. Cash Purchases and High-Value Goods

• Any cash purchase exceeding ₹2 lakh, including jewellery, luxury items, and travel-related expenses
• Buying vehicles or other assets above the prescribed financial threshold

3. Real Estate

• Buying or selling property worth ₹45 lakh or more. For transactions between ₹20 lakh and ₹45 lakh, Form 97 may still apply — but above ₹45 lakh, a PAN is required.

4. Hospitality and Events

• Cash payments exceeding ₹1 lakh to hotels, restaurants, or event managers — these entities are now required to collect PAN details for such payments.

5. Credit and Insurance

• Applying for a credit card
• Availing any kind of loan
• Purchasing an insurance policy with an annual premium of ₹50,000 or more

6. Other Financial Instruments

• Investments in mutual funds, bonds, and similar instruments above their respective prescribed limits

For all of the above, not having a PAN may mean the transaction cannot go through at all. Form 97 will not serve as a substitute in these cases.

Where Can Form 97 Still Be Used?

Yes, though the list is narrower than what Form 60 covered. Form 97 remains an option in the following situations:

• Opening a bank account in certain low-activity scenarios
• Property transactions valued between ₹20 lakh and ₹45 lakh
• Buying or selling unlisted shares worth over ₹1 lakh
• Cash payments exceeding ₹1 lakh to hotels or restaurants for events

Even in these cases, the form requires the individual's full name, address, and nature of the transaction. It must be submitted at the time of the transaction, and the receiving entity is required to report it to the Income Tax Department. So, while PAN may not be mandatory in these specific situations, the transaction is still fully documented and reported.

What If You Don't Have a PAN Yet?

The process of getting a PAN has become considerably simpler. Through Aadhaar-based e-KYC, the government now allows for instant PAN generation online, often completed within minutes. If you have an Aadhaar card and a mobile number linked to it, you can apply for a free e-PAN directly on the Income Tax Department's official portal.

For those who have already applied for a PAN but haven't received it yet, the acknowledgement receipt may be accepted in limited situations as proof of application. NRIs who don't hold an Indian PAN can, in certain cases, provide passport details or other prescribed identification. Aadhaar may also be accepted for some low-risk or government-designated transactions.

That said, these are specific exceptions rather than general alternatives. For most of the high-value transactions listed above, having a valid PAN is the straightforward route to completing your transaction smoothly.