Income Tax Act 2025: SFT Reporting, PAN Rules, Faceless Assessments & Revision Powers
India’s proposed Income Tax Act 2025 introduces stricter reporting rules, including mandatory disclosure of gifts of immovable property valued over ₹45 lakh and expanded PAN compliance thresholds. The new law also strengthens faceless assessments via AI-driven allocation and redefines revisionary powers for erroneous tax evaluations while retaining taxpayer protections.
India’s Income Tax Act 2025, replacing the 1961 Act, introduces significant procedural changes to enhance tax compliance. Rule 237 of the Income-tax Rules 2026 now requires reporting entities to disclose gifts of immovable property valued at ₹45 lakh or more, even if no consideration is exchanged. This expands the Statement of Financial Transactions (SFT) regime to cover previously unregulated high-value transfers, with registrars of property mandated to furnish details. The law also overhauls PAN-related provisions, requiring mandatory PAN for cash deposits or withdrawals exceeding ₹10 lakh annually, up from ₹50,000 daily under the old rules. PAN is now compulsory for all insurance policies, two-wheeler purchases, immovable property transactions above ₹20 lakh, and hotel/event payments over ₹1 lakh. Foreign travel and demonetization-specific provisions have been removed, while simplified PAN correction forms (PAN CR-01 and PAN CR-02) now require Aadhaar linkage. Faceless assessments under Section 273 are reinforced through AI-based allocation systems, involving National Faceless Assessment Centre (NFAC), Assessment Units, Verification Units, and Technical Units. This technology-driven approach aims to streamline scrutiny while reducing taxpayer interaction. Sections 377 and 378 redefine revisionary powers, clarifying standards for correcting erroneous assessments while balancing taxpayer safeguards with departmental authority. The new framework also updates reporting obligations for financial transactions, replacing older forms like 61A and 61B with Form 165. These changes reflect a broader shift toward digital compliance and real-time monitoring of high-value transactions, aligning with global tax transparency norms.
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