News: Draft tax rules propose Rs 20 lakh PAN threshold for property deals, but experts still advise quoting it-28-02-2026
The Draft Income Tax Rules, 2026 propose lifting the threshold for mandatory PAN quoting in property transactions from Rs 10 lakh to Rs 20 lakh, effective April 1, 2026. The change may also extend to gifts and joint development agreements. It is seen as a relief for first-time buyers in tier-2 and tier-3 cities, though experts recommend quoting PAN voluntarily because property deals carry tax implications, particularly for sellers who may owe capital gains tax.
The article illustrates this with Rina Soni, a first-time buyer in a Tier-III city who plans to buy a small apartment for Rs 18 lakh. Under Rule 114B of the Income Tax Rules, 1962, PAN is compulsory only above Rs 10 lakh, so her deal would have been reported. Under the draft rules she would not need to quote it. Her tax liability does not change, and capital gains rules would still apply if she sells later, so her advisor still suggests quoting PAN to keep a clean financial record.
The old limit has stayed fixed for years while property prices rose across large and small cities, and it increasingly looks out of step with reality. Rohit Jain, Managing Partner at Singhania & Co, explained that Rule 114B requires PAN where the consideration or stamp-duty value exceeds Rs 10 lakh, while the draft Rule 159 raises the trigger to Rs 20 lakh and expressly covers transfers by gift and joint development agreements.
Bhavya Khatreja, Senior Associate at Legum Solis, called the higher limit welcome for small and first-time buyers because it cuts procedural hurdles and simplifies registration paperwork.
Still, voluntarily quoting PAN is prudent even below Rs 20 lakh, the experts said. With PAN, Aadhaar and banking data now linked, a clear audit trail matters, and the tax authorities increasingly use data analytics to scrutinise financial behaviour. CA Dinesh K. Jain of Dinesh Aarjav & Associates said transparency at the outset reduces the risk of later queries, mismatches or notices, and that compliance should not hinge only on thresholds. Khatreja added that PAN is needed to mortgage a property, so it can matter when applying for a loan against property.
