Draft Income Tax Rules 2026: CBDT i.e. Central Board of Direct Taxes has released the draft of Income Tax Rules 2026. The purpose of this draft is said to be to make the income tax rules simpler and more clear. The draft includes many important proposals which will have a direct impact on common taxpayers.
According to the draft, it will be necessary to provide PAN if an amount of Rs 10 lakh or more is deposited or withdrawn in a financial year. Till now this rule was applicable on depositing Rs 50 thousand in a day, which has been proposed to be changed. Changes have also been suggested in the rules related to vehicle purchase. According to the proposal, PAN will be mandatory for purchasing a car or two-wheeler worth Rs 5 lakh or more. At present, it is mandatory to provide PAN when purchasing a vehicle of any value.
Many changes in the new Income Tax Act
There is also a proposal in the draft to increase the limit of payments made in hotels, restaurants and other programs. It has been said that it will be increased from the current Rs 50 thousand to Rs 1 lakh. It has also been proposed to increase the limit for transactions related to real estate. According to the draft, it will be mandatory to provide PAN when buying, selling or gifting property worth Rs 20 lakh or more. Currently this limit is Rs 10 lakh.
A proposal to change the rules related to insurance is also included. It has been said in the draft that it will be necessary to provide PAN to open an account with any insurance company. At present this rule applies to premiums of Rs 50 thousand or more.
Proposal to increase tax free education allowance
Changes have also been suggested in the rules related to House Rent Allowance i.e. HRA. According to the draft, the list of metro cities has been increased. Earlier Delhi, Mumbai, Chennai and Kolkata were included in this list, whereas now there is a proposal to add Bengaluru, Pune, Hyderabad and Ahmedabad also to it.
Apart from this, it has also been said in the draft to increase the limit of tax free allowance related to children. It has been proposed to increase the tax free education allowance for children from Rs 100 to Rs 3000 per child. There is also a plan to increase the limit of hostel allowance for children. According to the draft, it has been proposed to increase it from the current Rs 300 to Rs 9000 per child.
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