Income Tax Department Replaces Forms 60, 61 With New Forms 97 And 98
Income Tax replaces Forms 60 61 with Forms 97 98.
The Income Tax Department has introduced two new reporting formats—Forms 97 and 98—as part of broader compliance reforms under the Income Tax Act, 2025, which came into effect from April 1. The new system replaces the earlier Forms 60 and 61, which were used for declaring high-value transactions by individuals who do not possess a Permanent Account Number (PAN).
According to the department, the objective of the revision is to simplify compliance procedures and reduce the administrative burden on taxpayers. Form 97 is now required to be submitted by individuals who do not have a PAN but are still involved in specified financial transactions. Form 98, on the other hand, is to be filed by entities that receive Form 97 declarations, ensuring proper tracking and reporting within the tax system.
The government has also tightened PAN-related requirements for several financial activities, thereby limiting the situations in which Form 97 can be used. Transactions such as purchasing motor vehicles above ₹5 lakh, opening demat accounts, applying for credit cards, and investing in mutual funds or RBI bonds above ₹50,000 now mandatorily require a PAN, eliminating the need for Form 97 in these cases.
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However, Form 97 continues to apply in certain scenarios where PAN is not compulsory. These include high-value payments during events such as hotel or restaurant transactions exceeding ₹1 lakh, opening new bank accounts, property transactions above ₹20 lakh, and the purchase or sale of unlisted shares above ₹1 lakh. The updated framework aims to streamline reporting while ensuring that large financial movements remain traceable.
Officials estimate that these changes could significantly reduce the number of such declarations filed each year, potentially cutting them from around 12.5 crore to less than 2 crore. The shift is expected to improve efficiency in tax administration while encouraging wider adoption of PAN for financial transactions.
Form 98 has been introduced as a compliance counterpart to Form 97, requiring recipients to report and verify declarations received from individuals. The Income Tax Department stated that this dual-form mechanism is designed to enhance transparency and ensure better monitoring of transactions falling under Rule 159 of the Income Tax Rules, 2026.
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