Amit Singh, a small-business owner, plans to purchase a residential plot from Anagha Gupta for ₹18.5 lakh. Under the earlier framework (1962 Rules), property transactions above ₹10 lakh required both parties to quote their PAN. However, since this deal will take place after April 1, 2026, it will be governed by the new Income Tax Rules, 2026, which raise the mandatory PAN threshold to ₹20 lakh.
From April 1: Higher PAN threshold for property deals On March 20, 2026, the Central Board of Direct Taxes (CBDT) notified the Income-tax Rules, 2026, effective from April 1, 2026. One of the immediate changes for individuals is the revision of the threshold for quoting PAN in real estate transactions, which has been increased from ₹10 lakh to ₹20 lakh. “The new rules also broaden the compliance scope by explicitly covering property transfers through gifts and joint development agreements, subject to this revised threshold. The practical impact is significant for buyers and sellers in the segment below ₹20 lakh,” says Rahul Charkha, Partner, Economic Laws Practice.
For buyers, the immediate benefit is reduced paperwork at the registrar’s office or with the builder. For sellers, especially senior citizens or low-income individuals disposing of small ancestral assets, the change reduces the friction of obtaining and quoting a PAN for a one-time transaction. However, it is important to note that exemption from quoting PAN does not imply exemption from tax obligations. “Sellers are required to report any capital gains on their income tax returns. Also, both buyers and sellers must diligently maintain proper documentation to substantiate the transaction independently,” says Charkha.
Best practices to avoid future tax issues
“Even when not mandatory, voluntarily providing your PAN can help ensure accurate reporting in your Annual Information Statement (AIS) and reduce the chances of discrepancies later. It is equally important to maintain robust documentation, which includes keeping copies of PAN or Aadhaar, bank transaction records, and detailed sale agreements, even for lower-value transactions, as these can be crucial in case of scrutiny or audits,” says Tusi Kumar, Partner, Singhania & Co.
Thus, the absence of a legal mandate to quote PAN does not mean there is no risk. Taxpayers should follow prudent practices to ensure transparency and avoid future tax complications. Payments should be routed through banks via transfers or checks rather than in cash. It is important to maintain a complete set of documents, including the agreement to sell, sale deed, stamp duty and registration receipts, municipal records, property tax receipts, and any correspondence with builders or authorities, with digital backups.
Buyers should also clearly document the source of funds, whether from savings, loans, or gifts, supported by bank statements and gift deeds, if applicable. Sellers, on the other hand, should preserve records of the original purchase, improvement costs, and related expenses to accurately compute capital gains in the future.
Mandatory PAN quoting for transactions above ₹20 lakh
“Mandatory PAN quoting applies for transactions above ₹20 lakhs. For property transactions, PAN must be furnished by both buyer and seller for the purchase or sale of immovable property (land, building, or rights) if the transaction value exceeds ₹20 lakh. The rules also explicitly cover property transfers through gifts and joint development agreements within this ₹20 lakh threshold,” says Kumar.
Under the stamp valuation rule, if the Stamp Valuation Authority (circle rate) values the property above ₹20 lakh. PAN reporting is mandatory regardless of a lower actual transaction value. In addition, cash deposits or withdrawals aggregating to ₹10 lakh or more in a financial year require quoting PAN. If PAN is unavailable, the concerned party must submit Form 60.
Also Read: Housing sales down 13% YoY to 98,761 units in Q1 2026, falls below 1 lakh after 18 quarters: Report
Additionally, always verify the seller’s credibility and documentation thoroughly; ensuring a clear title and proper records can help you avoid potential legal disputes or unexpected tax liabilities down the line.
Anagh Pal is a personal finance expert who writes on real estate, tax, insurance, mutual funds and other topics
