As gold prices continue to hit record highs, their impact is expected to feature prominently in Union Budget 2026. One of the key proposals gaining traction is increasing the current ₹2 lakh PAN-Aadhaar disclosure limit for gold and jewellery purchases. With gold becoming significantly more expensive over the past decade, industry experts and jewellers believe the existing threshold is outdated and needs urgent revision.

At present, anyone purchasing gold or gold jewellery worth more than ₹2 lakh is required to provide their PAN or Aadhaar number to the jeweller. This rule, introduced in 2016, was designed to monitor high-value transactions and curb black money. However, when the policy was implemented, the price of 10 grams of gold ranged between ₹25,000 and ₹32,000. Fast forward to 2026, and the price of 10 grams of gold has crossed ₹1.6 lakh, making even modest purchases fall under the reporting requirement.

Under Section 139A of the Income Tax Act and Rule 114B, buyers must provide PAN details if their gold or jewellery purchase exceeds ₹2 lakh. If PAN is unavailable, Aadhaar can be submitted instead. This rule came into effect on January 1, 2016, when the government revised reporting thresholds and removed separate limits for jewellery transactions.

Since then, gold prices have increased multiple times, but the ₹2 lakh limit has remained unchanged, creating compliance challenges for both customers and jewellers.

The original purpose of the PAN disclosure requirement was to track large financial transactions, prevent tax evasion, and maintain a record of high-value purchases. Jewellers are required to report such transactions through the Statement of Financial Transactions (SFT) to the Income Tax Department.

These reports include:

• Buyer’s PAN or Aadhaar

• Transaction amount

• Mode of payment

• Purchase date

This data is later matched with the buyer’s Income Tax Return (ITR) to ensure that spending aligns with declared income. The intent was not to target ordinary buyers, but to flag potentially suspicious high-value transactions.

Over the last 8–9 years, gold prices have surged dramatically. Today, the price of 10 grams of gold hovers around ₹1.65 lakh, and when making charges are added, even a small jewellery purchase can cross ₹2 lakh.

In India, buying gold is deeply tied to weddings, festivals, and cultural traditions. Families often purchase gold as a form of savings and investment. As a result, even middle-class buyers now find themselves subject to PAN reporting requirements for routine purchases.

This has led to concerns that the current threshold no longer reflects actual “high-value” transactions, but instead burdens ordinary customers and small jewellers with additional paperwork.

Jewellers and industry associations argue that:

• Regular family purchases are being wrongly categorized as high-value

• Small and medium jewellers face extra compliance costs and administrative work

• Honest customers are forced into unnecessary documentation

• The rule now captures price inflation, not suspicious financial behavior

Tax experts also believe the limit has effectively become outdated due to inflation and rising commodity prices.

According to Chartered Accountant Govind Sharma, the government should reassess the ₹2 lakh threshold in Budget 2026. Possible reforms include:

• Increasing the limit significantly

• Linking the threshold to current gold prices or inflation, allowing it to adjust automatically over time

• Redefining what qualifies as a high-value gold transaction

The objective would be to maintain the spirit of the law—tracking genuinely large and suspicious purchases—while avoiding unnecessary scrutiny of regular consumers.

If the PAN-Aadhaar limit is raised:

• Honest buyers would enjoy relief from extra documentation

• Small jewellers would face fewer compliance hurdles

• The system could focus on truly large and risky transactions

• Ordinary wedding and festival purchases would no longer feel like regulatory burdens

Experts believe this would strike a better balance between tax enforcement and consumer convenience.

With gold prices reaching historic levels, the ₹2 lakh PAN disclosure limit appears increasingly out of sync with today’s market reality. What was once considered a high-value purchase is now a routine transaction for many Indian households. As Budget 2026 approaches, expectations are growing that the government will revise this threshold to reflect current economic conditions.

If implemented, such a move could ease compliance pressure, support the jewellery industry, and ensure that tax monitoring remains focused on genuine high-risk transactions, rather than everyday buyers.