On February 9, 2026, the Central Board of Direct Taxes (CBDT) released the Draft Income Tax Rules, 2026, which propose doubling the threshold for quoting a Permanent Account Number (PAN) for high-value hospitality and event-related bills.
Under the new proposal, quoting a PAN will become mandatory only if a hotel or restaurant bill exceeds ₹1 lakh. This is a significant increase from the current limit of ₹50,000, which has been in place under the Income Tax Rules of 1962.
Key Changes in the Hospitality & Event Sector
The proposed rules expand the scope of the ₹1 lakh threshold to include not just hotel stays, but also event-related infrastructure and services.
| Transaction Type | Current PAN Threshold | Proposed PAN Threshold (2026) |
| Hotel/Restaurant Bills | ₹50,000 | ₹1,00,000 |
| Convention Centres | ₹50,000 | ₹1,00,000 |
| Banquet Halls | ₹50,000 | ₹1,00,000 |
| Event Management Services | ₹50,000 | ₹1,00,000 |
Why is the Government Raising the Limit?
The shift is part of a broader effort to operationalize the Income Tax Act, 2025, which replaces the 60-year-old 1962 Act starting April 1, 2026.
- Adjusting for Inflation: The ₹50,000 limit was set years ago. With rising room tariffs and banquet costs, the government aims to reduce the “paperwork hassle” for middle-class families hosting small functions or taking vacations.
- Capturing “Relevant” Data: Officials stated the goal is to leverage AI-enabled analytics and automated reporting from banks. By raising the threshold, the tax department can focus on high-value “big fish” while reducing the data noise from smaller transactions.
- Ease of Doing Business: For the hospitality sector, this reduces the compliance burden of collecting and verifying PAN cards for thousands of smaller customers.
Other Major PAN Threshold Changes (Draft 2026)
The hotel bill update is just one part of a comprehensive overhaul of financial tracking limits.
- Cash Transactions: PAN will be required for cash deposits or withdrawals totaling ₹10 lakh or more in a financial year (currently ₹50,000 per day).
- Motor Vehicles: For all vehicles (including two-wheelers), PAN is required only if the price exceeds ₹5 lakh. (Previously, it was mandatory for all cars regardless of price).
- Real Estate: The threshold for mandatory PAN in property deals (purchase, sale, or gift) has doubled from ₹10 lakh to ₹20 lakh.
- Insurance: PAN will now be mandatory for all new account-based relationships with insurance companies, regardless of the premium amount.
Timeline for Implementation
- Public Feedback: The CBDT has invited suggestions and comments on these draft rules until February 22, 2026.
- Final Notification: The finalized rules are expected to be officially notified by the first week of March 2026.
- Go-Live Date: The new limits will take effect on April 1, 2026, coinciding with the start of the new financial year.
