The Central Board of Direct Taxes (CBDT) has released the draft Income-tax Rules, 2026, bringing major relief to taxpayers. These new rules are set to come into effect from April 1, 2026. The government aims to make tax filing easier for the common man by simplifying the process. One of the biggest changes is that ITR forms will now come pre-filled with income and expenditure details starting from the financial year 2026-27. Taxpayers will just need to review the data and submit it with a single click if everything is accurate.
Big Relief on PAN Card Usage for Cash and Purchases
The new rules have significantly relaxed the requirements for showing a PAN card for various day-to-day transactions. This move will reduce the paperwork burden for common people. Earlier, the limits were quite low, but now the government has proposed to increase the threshold for mandatory PAN quoting across several categories.
- Cash Transactions: PAN will now be mandatory only if cash deposits or withdrawals cross ₹10 lakh in a financial year.
- Car and Bike Purchase: You need to provide your PAN only if the vehicle price is more than ₹5 lakh. Currently, it is required for all motor vehicle purchases.
- Hotel and Restaurant Bills: The limit has been raised to ₹1 lakh. You do not need to show a PAN for bills below this amount.
- Property Purchase: For buying or selling property, PAN is mandatory only if the deal value exceeds ₹20 lakh.
New HRA Benefits and Allowance Rules for Employees
Salaried employees living in major tech and business hubs will see a big benefit in their House Rent Allowance (HRA). The government has updated the list of cities considered as “Metro Cities” for tax calculation. Apart from this, limits for various allowances given by employers have also been increased to match current costs.
HRA Metro Cities Update: Bengaluru, Hyderabad, Pune, and Ahmedabad are now classified as Metro Cities. Employees renting homes in these cities can now claim a 50% HRA deduction, up from the previous 40%.
Motor Car and Meal Allowance: The tax-free monthly limit for car allowance is now ₹8,000 for cars up to 1600cc and ₹10,000 for larger cars. The tax-free limit for office meals has been increased to ₹200 per meal.
Simplification of Rules and Crypto Disclosure
The Income Tax Department is working to cut down the number of tax rules from 511 to 333 to make the legal framework simpler. The total number of forms is also being reduced from 399 to just 190. This cleanup is intended to remove confusion and help taxpayers file returns easily.
For those investing in digital assets, disclosure of cryptocurrency holdings will become mandatory in the new ITR forms. Crypto exchanges will share transaction data directly with the department to ensure transparency. Additionally, the Central Bank Digital Currency (e-Rupee) will now be accepted as a valid mode for making electronic tax payments.
