CBDT (Central Board of Direct Taxes) has released the draft Income Tax Rules 2026. The draft talks about simplifying and clarifying the income tax rules. The draft includes many important proposals, which will have a direct impact on common taxpayers.
According to the draft, PAN will be required for deposits or withdrawals of ₹10 lakh or more in a financial year. Earlier this rule was applicable for depositing ₹ 50,000 in a day, but a proposal has been made to change it. Changes have also been suggested in the rules for purchasing a car. According to the proposal, PAN will be required for purchasing a car or two-wheeler worth ₹5 lakh or more. Currently, PAN is mandatory for purchasing any vehicle of any value.
Many changes in the new Income Tax Act
There is also a proposal in the draft to increase the limit for payments made in hotels, restaurants and other events from the current ₹ 50,000 to ₹ 100,000. There is also a proposal to increase the limit of real estate transactions. According to the draft, PAN will be required for buying, selling or gifting property worth ₹20 lakh or more. Currently this limit is ₹ 10 lakh. There is also a proposal to change the insurance rules. It has been said in the draft that it will be necessary to provide PAN to open an account in any insurance company. Currently this rule applies to premiums of ₹ 50,000 or more.
Proposal to increase tax-free education allowance
Changes have also been suggested in the rules related to House Rent Allowance (HRA). According to the draft, the list of metro cities has been increased. Earlier Delhi, Mumbai, Chennai and Kolkata were included in this list, but now there is a proposal to add Bengaluru, Pune, Hyderabad and Ahmedabad to it.
The draft also calls for increasing the limit of tax-free allowance for children. It is proposed to increase the tax-free education allowance for children from ₹100 to ₹3,000 per child. There is also a plan to increase the limit of hostel allowance for children. According to the draft, there is a proposal to increase it from the current ₹300 to ₹9,000 per child.