India’s post office savings network is seeing tighter compliance norms under the Income-tax Rules, 2026, with the quoting of Permanent Account Number (PAN) becoming mandatory to a wide range of financial
transactions, including cash deposits and withdrawals.
The changes are part of a broader effort to align small savings instruments with the formal tax reporting system, improve transparency, and strengthen tracking of high-value transactions.
PAN Now Mandatory For Key Post Office Transactions
Under the revised framework, depositors will be required to quote PAN for multiple financial activities at post offices. These include opening of accounts, making deposits, withdrawing funds, and investing in time deposits.
The requirement flows from several provisions, Rules 159, 160, 161, 211 and 237, under the Income-tax Rules, 2026. This indicates that the change is not a narrow procedural tweak, but part of a broader compliance architecture aimed at tracking financial flows more effectively.
For millions of small savers who rely on post office schemes, this effectively means PAN is no longer optional for routine transactions.
What Happens If You Don’t Have PAN?
The rules provide a structured alternative mechanism for individuals who do not hold a PAN. Such depositors will now have to submit Form 97, which replaces the earlier Form 60. This is not a simple declaration. Form 97 requires detailed disclosures, including the depositor’s identity and address, the nature and amount of the transaction, and supporting documents to validate the same.
Post offices have been directed to collect and maintain this information, ensuring that even non-PAN transactions remain traceable within the tax framework.
Big Change In TDS Declarations: Form 121 Introduced
In another significant move, the government has merged Form 15G and Form 15H into a single, standardised declaration Form 121. Earlier, Form 15G was used by individuals below 60 years and Form 15H by senior citizens to avoid TDS on interest income, subject to eligibility. The new Form 121 replaces both and will now serve as a unified declaration across age groups.
The conditions remain largely unchanged: the form can be submitted only if the taxpayer’s estimated total income leads to nil tax liability.
However, there are important procedural updates. The form must now be submitted every financial year, and post offices will handle verification by collecting Part A from the depositor and completing Part B internally.
Record-Keeping Norms Tightened
A key compliance requirement under the new rules is enhanced record retention. Post offices are now mandated to maintain these declarations and related documents for a period of seven years. This aligns post office operations with broader tax audit standards, ensuring that records are readily available for scrutiny if required.
Interim Relief For Depositors
While the rules are effective immediately under Post Office SB Order No. 02/2026, the transition will not be abrupt. Until backend systems are fully upgraded, post offices will continue to follow the existing process for Forms 15G and 15H on a temporary basis. This provides a limited window for depositors to adapt to the new regime.
Why This Matters
The move reflects a larger policy direction, bringing traditional, cash-heavy savings channels into the tax reporting net. By mandating PAN and standardising declaration forms, the government aims to strengthen audit trails, curb tax evasion, and improve compliance among small investors. At the same time, it reduces duplication in paperwork and simplifies processes in the long run.
What Depositors Should Do Now
For account holders, the message is straightforward. Ensure that your PAN is linked and readily available for all post office transactions. If you do not have one, be prepared to furnish detailed disclosures through Form 97.
Equally important is staying updated with the shift to Form 121 for TDS-related declarations, especially if you rely on interest income exemptions. With compliance tightening across the board, preparedness, not paperwork delays, will determine how smoothly you navigate the new Post Office Rules 2026.
