Post office transactions rules changed: Key PAN, TDS, reporting updates customers must know

The Department of Posts has issued an order to all its circles and regions to implement the applicable portion of the new Income Tax Rules, 2026. Its order dated April 27, requires the individuals and others to quote PAN for specified high-value transactions, an alternative for those who don’t possess PAN, a consolidated and single declaration form for not deducting taxes.

At the same time, post offices shall follow due reporting and record retention requirements. Let us look at the compliance-related changes:

High-value transactions

Post office customers are now required to quote their PAN for most financial transactions. They are, opening and operating accounts, investing in savings schemes, cash deposits aggregating to Rs 10 lakh in a financial year in one or more accounts of a person, cash withdrawals aggregating to Rs 10 lakh or more in a financial year in one or more accounts of a person, time deposit of an amount exceeding Rs 50,000 or aggregating to more than Rs 5 lakh during a financial year.

Those individuals, HUFs and Associations of Persons who don’t possess PAN, but wish to enter into those transactions, will also be allowed only upon filing the Form 97. The said form is a replacement of the erstwhile Form 60, with certain changes. It insists upon these mandatory details — Part A: Nature of transaction; Part-B: Declaration; Part-C: Identity and address, including name, date of birth, PAN applied for or not, Aadhaar number, resident and office address, mobile/telephone number, email id; Part-D: Details of the transaction; Part-E: Documents submitted as proof of identity, address, and date of birth; and Part-F: Verification with the signature of the declarant.

No deduction of TDS

To receive certain incomes from the post office, such as provident fund withdrawals, pension, insurance commission, rent, interest on deposits, etc, without deduction of tax, a resident individual, HUFs, and other specified entities are required to submit a self-declaration in Form 121. The said form is unified and replaced with the erstwhile Form 15G and Form 15H.

Form 121 insists upon the following details — Part A: Details of the declarant, income and declaration. The declaration in Form No. 121 should be filed with the payer for paying such income for every tax year. This form can be submitted online or physically to the payer, at the beginning of the tax year or before the first payment is made.

In case of income being received from multiple payers, then the form is required to be submitted to each payer. Part B: Details of the person responsible for paying the above income, name, address, TAN, PAN, contact details and applicable tax year, declaration and declaration by the person responsible for paying the income.

Now, both taxpayers, i.e. below the age of 60 years and above 60 years, should use the same common form and avoid relevant income from being subjected to TDS. The form is meant only for those taxpayers whose estimated total income for the tax year is likely to be nil and don’t want tax to be deducted at source, subject to certain conditions.  

Reporting and record retentions

The Income Tax Rules, 2026, rest an obligation on the post offices for reporting and retention of these forms. Accordingly, upon receipt of Form 97, the recipient shall verify the identity, ensure its completeness, duly signed and preserve it for a period of six years from the end of the financial year, in which the transaction was undertaken. The Head Postmaster shall report the details to the Income Tax Department.

Similarly, in the case of Form 121, it should be preserved for a period of seven years from the end of the tax year, in which the declaration is received. The Head Postmaster shall manually allot a 26-character unique number to each declaration received from the depositor during every quarter of the financial year. A TDS statement for non-tax deduction cases is required to be filed quarterly by the 7th of the month following the quarter, as per prescribed rules.  

The revised and updated regulations are in line with the new Income Tax Rules, 2026, which came into force from April 1, 2026. From now on, all post office customers should adhere to these changes and comply with them to carry out day-to-day transactions smoothly.