PAN Card May Not Be Mandatory for Properties Up to Rs 20 Lakh

PAN Card Update: Big relief for some people. The Income Tax Department has released draft income tax rules under the new income tax regime. It proposes significant changes regarding the requirement of a PAN card for transactions involving the purchase and sale of property.

What is the new rule?

Until now, providing a PAN card was mandatory for buying or selling a property (house or plot) worth more than Rs 10 lakh. The government has now proposed raising this limit to Rs 20 lakh. If this rule is implemented, providing a PAN card will no longer be required for property transactions worth less than Rs 20 lakh. However, providing a PAN card will remain mandatory for properties worth Rs 20 lakh or more.

Gifts and joint development deals will also be covered

The new draft states that not only purchases and sales, but also certain other property-related transactions will now be covered under PAN, such as gifting property and joint development agreements. However, the limit of Rs 20 lakh will still apply to these transactions.

Why was this limit increased?

Tax experts believe that the old threshold of Rs 10 lakh was too low for the current real estate market. Today, even small properties in cities often cost more than Rs 10 lakh, forcing even small buyers to face the hassles of reporting. According to experts, this change will provide great relief to property buyers in small towns and low-cost markets and will reduce their paperwork.

What hasn’t changed?

The new proposal will keep the system for tracking large transactions the same as before. Providing a PAN will be mandatory for every property transaction worth Rs 20 lakh or more. This will allow the tax department to track large property transactions and make it easier to match them to the buyer’s income. These rules are currently in draft form. The government has sought suggestions from the public and stakeholders. Final rules will be implemented only after reviewing these suggestions.

PAN application process tightened for companies

The deal proposal also tightens the PAN application process for companies. It will now be mandatory to provide a declaration at the time of application stating that the company does not already have a PAN. Internal checks will be required at branches and project offices to avoid duplication of PANs.