Budget 2026 Amends PAN Provision to Cover ‘Other Transactions’ Under New Income Tax Act [Read Finance Bill 2026]
Though the amendment brings forth just a minor change in terms of the wording, the implications could be significant.
![Budget 2026 Amends PAN Provision to Cover ‘Other Transactions’ Under New Income Tax Act [Read Finance Bill 2026]](https://images.taxscan.in/h-upload/2026/02/01/2123112-budget-2026-amends-pan-provision-cover-transactions-under-new-income-tax-act-taxscan.webp "Budget 2026 Amends PAN Provision to Cover ‘Other Transactions’ Under New Income Tax Act [Read Finance Bill 2026]")
The Union Budget for the financial year 2026-27 was presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on Sunday, February 1, 2026.Though rather inconspicuous, a key amendment comes in the form of a modification to the provisions governing the use and applicability of the Permanent Account Number (PAN) under the Income Tax Act, 2025.Section 56 of the Finance Bill, 2026...
The Union Budget for the financial year 2026-27 was presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on Sunday, February 1, 2026.
Though rather inconspicuous, a key amendment comes in the form of a modification to the provisions governing the use and applicability of the Permanent Account Number (PAN) under the Income Tax Act, 2025.
Section 56 of the Finance Bill, 2026 proposes an amendment to section 262(10)(c) of the Income Tax Act, 2025, which lists the scope of transactions to which PAN-related requirements apply.
Also Read:Budget 2026 proposes Major Corporate Tax Changes: Govt. to Revamp MAT Framework [Read Finance Bill 2026]
Under the existing provision, the wording is limited to matters “pertaining to business or profession”. The proposal brought about by the Finance Bill 2026 introduced today aims to substitute this phrase with broader language so as to expressly include transactions beyond business or professional activities.
The relevant amendment proposed under section 56 of the Finance Bill, 2026 reads as follows:
56. In section 262 of the Income-tax Act, in sub-section (10), in clause (c), for the words “pertaining to business or profession”, the words “pertaining to, business or profession, or other transactions,” shall be substituted.
The amendment effectively widens the scope of section 262(10)(c) by clarifying that PAN-related obligations may extend not only to transactions connected with business or profession, but also to other transactions as may be prescribed or covered under the Act.
Why does this matter?
In terms of the newIncome Tax Act, 2025 which shall come into force from 1 April, 2026, the latest provision would reduce interpretational disputes and prevent a narrow reading of the provision that would otherwise restrict its application to business or professional transactions only.
This amendment is just one of numerous simplification and rationalisation efforts taken by the finance ministry.
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