PAN Card for Property Registration

When it comes to major financial transactions like buying or selling land, houses, or flats, and during property registrations, a PAN card is one of the most essential documents required to validate the process. Real estate involves various types of immovable property transactions, and the following guide will help you understand when the use of a PAN card is mandatory as per the Government of India.

Is PAN mandatory for property transactions?

The requirement of a Permanent Account Number (PAN) for property transactions is a significant regulatory measure. This stipulation is designed to reduce land fraud and prevent the creation of counterfeit arrangements, thereby enhancing the transparency and integrity of property transactions.

In transactions involving the purchase or sale of properties, it is mandatory to include the PAN of the property owner. Issued by the Income Tax Department, the PAN serves as a crucial element in documenting these transactions. This requirement acts as a deterrent against fraudulent practices and ensures that all financial aspects of property dealings are properly recorded and monitored.

The need for this mandate stems from the fact that buying and selling properties often involve large financial transactions. By linking these transactions to PAN numbers, the authorities create a traceable and verifiable record of such dealings. This not only aids regulatory bodies in effective monitoring but also safeguards against illegal practices like land fraud and the creation of fraudulent property arrangements.

Property registration – Role of PAN card

In property transactions, incorporating a PAN (Permanent Account Number) card is crucial for thorough documentation. This requirement applies to various activities, such as buying or selling properties, leasing spaces or lands, and the formal process of property registration. PAN cards, specifically for Indian citizens, play a significant role in recording financial transactions. This documentation is valuable for the Income Tax Department as it helps monitor an individual's income, investments, and borrowings effectively.

In property transactions, both buyers and sellers must provide their PAN card Numbers to the registrar overseeing the transaction. This ensures a transparent and traceable record of financial involvement in property dealings. Here are specific scenarios where providing PAN details is mandatory:

1. Agreements of sale or purchase

When the value of immovable assets exceeds Rs. 10 lakh, it is mandatory for the involved parties to provide their PAN card Numbers. This ensures significant transactions are thoroughly documented.

2. Transactions exceeding Rs. 50 lakh

For transactions over Rs. 50 lakh, buyers must deduct 1% TDS (Tax Deducted at Source) and remit this amount to the Income Tax Department. Non-compliance with this TDS requirement can result in the deduction rate increasing to 20%.

For more detailed information on the importance of PAN in these transactions, read about PAN card registration.

Does an NRI need a PAN card in property registration?

The question of whether an NRI needs a PAN card for property registration is complex. While NRIs do not need special permission to buy immovable property, they may need to provide a PAN for transaction documentation. In addition to a PAN card, NRIs also need the following:

A valid Indian Passport. If unavailable, they must show a document proving their Indian origin or hold an Overseas Citizen of India (OCI) Card.

A power of attorney is required if NRIs are absent and need to perform transactions through a representative.