Is PAN Mandatory for Property Purchases in India

Yes, PAN (Permanent Account Number) is mandatory for purchasing or selling immovable property in India above a specified threshold. It is a regulatory requirement under the Income Tax Rules (Rule 114B) and aims to bring transparency to high-value real estate transactions and reduce tax evasion.

• PAN Requirement Thresholds in Real Estate

• Quoting PAN is mandatory for any property transaction where the sale or purchase value is ₹10 lakh or more.

• Even if the stamp duty value or circle rate exceeds ₹10 lakh, PAN must be quoted.

• This rule applies to both the buyer and the seller of the property.

• PAN is required even for transactions below ₹10 lakh, if TDS under Section 194-IA is applicable.

• TDS Deduction and PAN for High-Value Deals

• For property transactions over ₹50 lakh, the buyer must deduct 1% TDS under Section 194-IA.

• The buyer must furnish both their PAN and the seller’s PAN while filing Form 26QB.

• The PAN is used to generate Form 16B, the TDS certificate given to the seller.

• Absence of PAN may lead to penalty, invalid TDS credit, or disallowance of transaction.

• PAN Requirement in Property Registration

• PAN details must be submitted to the sub-registrar during the registration of property documents.

• It is part of the property registration checklist required under state revenue rules.

• In case of joint ownership, all parties must quote PAN, if their share exceeds threshold.

• PAN is also captured in the registry office’s database for regulatory and audit purposes.

• Exceptions and Alternatives to PAN

• If the person does not have a PAN, they must submit Form 60 declaring the reason.

• Form 60 must be supported by valid identity proof and address details.

• However, frequent use of Form 60 may lead to scrutiny or compliance notices.

• NRIs, companies, or trusts must also quote PAN when dealing in property, as applicable.

• Importance of PAN in Real Estate Compliance

• PAN helps the Income Tax Department track capital gains, TDS, and wealth accumulation.

• It links property ownership with the individual’s Form 26AS and AIS.

• PAN ensures proper reporting and prevents the use of benami (proxy) names in property transactions.

• In the absence of PAN, the property deal may be withheld or flagged for review by authorities.