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Following the enactment of the Income Tax Act, 2025, and the Income Tax Rules, 2026, the submission of a PAN (Permanent Account Number) has now been made mandatory for major financial transactions. Previously, individuals who did not possess a PAN could manage by filling out Form 60; however, Form 97 has now replaced it. Nevertheless, there are several key transactions where even Form 97 will not be accepted, and the direct submission of a PAN will be strictly required.

**Simplified Process, Reduced Disputes**
The new Forms 97 and 98 have been designed using simple language and a pre-filled format. Additionally, efforts have been made to minimize errors and disputes by increasing the utilization of technology. The Tax Department states that these changes will simplify compliance and lead to an 80–85% reduction in the volume of forms required to be filed.

**PAN Mandatory for Purchases Exceeding ₹2 Lakhs**
According to Chartered Accountant Suresh Surana, under the new regulations, it is mandatory to provide a PAN for the purchase of any goods or services exceeding ₹2 lakh. This includes high-value purchases such as gold jewelry. In other words, if you purchase gold jewelry worth more than ₹2 lakh, the transaction cannot be completed without a PAN.

**PAN Strictly Mandatory for These Transactions**
The government has designated specific transactions for which the option of submitting Form 97 will not be available. These include the purchase of a vehicle exceeding ₹5 lakh, applying for a credit card, opening a Demat account, and investing more than ₹50,000 in mutual funds or bonds. Furthermore, a PAN will also be mandatory for cash deposits or withdrawals exceeding ₹10 lakh, security transactions exceeding ₹1 lakh, and the purchase or sale of unlisted shares.

**Usage of Form 97 Curtailed**
Following the implementation of the new rules, the scope of Form 97's usage has become significantly limited. While approximately 12 crore Form 60s were previously filed annually, that figure is now projected to drop to around 2 crore. The government has exempted small and low-risk transactions from reporting requirements, thereby reducing the need to file forms.

**Form Requirement Eliminated in Certain Cases**
Under the new rules, transactions involving the purchase of foreign currency, cash purchases of bank drafts or pay orders, and transactions related to prepaid payment instruments have been excluded from the scope of Form 97.

**What is the Impact?**
The objective of these changes is to enhance the transparency of the tax system and curb fraudulent transactions. It is now evident that most major financial activities will not be possible without a PAN, which will further strengthen tax tracking mechanisms.

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