No PAN? New CBDT rule explains how high-value transactions will now be reported

The Central Board of Direct Taxes (CBDT) has introduced a new system for reporting certain high-value transactions where a person does not have a Permanent Account Number (PAN).

In a notification issued on Tuesday (September 15), the CBDT explained how banks, financial institutions and other specified organisations will have to report such transactions to the Income Tax Department.

The new system will come into effect from September 15 itself.

What is the issue?

PAN is required for several important financial, banking and property transactions. But what happens if a person is required to provide PAN but does not have one?

Under the new Income-Tax Rules, such a person can submit a declaration in Form 97 instead of PAN, where the rules allow it.

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The organisation handling the transaction — such as a bank or another specified reporting entity — then has to report the details of that declaration to the Income Tax Department.

That report will now be made through Form 98.

So, what exactly changes?

The new system creates a simple chain:

No PAN → person submits Form 97 → bank/other reporting entity reports it in Form 98 → Income Tax Department receives the information.

The CBDT notification explains how this process will work.

Reporting organisations will first have to register with the Income Tax Department and obtain a unique number called ITDREIN.

They will then use the prescribed system to submit Form 98.

If they make a mistake, the new procedure also allows them to submit a correction. If a report was filed by mistake, there is also a procedure for deleting it.

Who will be affected?

The biggest impact will be on banks, financial institutions and other organisations that are required to report these transactions.

They will have to make sure that the information given by customers is correctly recorded and reported to the tax department.

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For ordinary people, the change will mainly matter if they do not have a PAN and carry out a transaction for which PAN is normally required.

In such cases, they may have to provide the required declaration instead.

Will everyone without a PAN have to file Form 97?

No. Form 97 is relevant only in situations covered by the rules relating to specified transactions.

The notification does not mean that every person who does not have a PAN must automatically file Form 97.

The requirement depends on the type of transaction and the circumstances specified under the Income-tax Rules.

What about transactions from previous years?

This is an important part of the notification.

Transactions relating to FY 2025-26 and earlier years will continue to be reported under the old system using Form 61.

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In other words, these older transactions do not suddenly move to the new Form 98 system.

The old rules will continue to apply for reporting, corrections and deletions relating to those years.

Why is this important?

The move is aimed at making it easier for the Income Tax Department to keep track of certain high-value transactions where PAN is not available.

For banks and other reporting organisations, it also means they will need to keep their records and reporting systems accurate.

For taxpayers, it is another reason to ensure that information provided during major financial or property transactions is correct.

The notification is, therefore, mainly about how information will be reported, rather than introducing a new tax.

What experts say

Abhishek A Rastogi, Founder of Rastogi Chambers, said the notification provides a clear process for registration, reporting, correcting mistakes and deleting reports filed inadvertently.

He said the link between Form 97 submitted by the person and Form 98 filed by the reporting organisation is particularly important for banks, financial institutions and other entities dealing with high-value transactions.

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Rastogi also pointed to the continuation of Form 61 for FY 2025-26 and earlier years, saying it provides continuity while the tax system moves from the old 1961 law to the new framework.

He added that banks and other reporting organisations will need to pay close attention to the accuracy of the information they submit.

In a nutshell

If you are an ordinary taxpayer, there is no new form that everyone needs to start filing simply because of this notification.

The change is mainly aimed at organisations that report specified high-value transactions to the Income Tax Department.

However, if you do not have a PAN and undertake a transaction covered by the rules, you may be required to provide Form 97. The bank or other reporting organisation will then report the relevant details through Form 98.

For transactions relating to FY 2025-26 and earlier years, Form 61 will continue to apply.