News: New income tax rules raise PAN threshold for property transactions to Rs 20 lakh from April 1-31-03-2026

The Central Board of Direct Taxes (CBDT) notified the Income-tax Rules, 2026 on March 20, 2026, effective from April 1, 2026. One change for individuals is that the threshold for quoting PAN in real estate transactions has been raised from Rs 10 lakh to Rs 20 lakh. The article gives the example of Amit Singh, who plans to buy a plot for Rs 18.5 lakh from Anagha Gupta; under the earlier rules a deal above Rs 10 lakh needed both parties’ PAN, but a deal after April 1 falls under the new threshold.

Rahul Charkha, Partner at Economic Laws Practice, said the new rules also expressly cover property transfers through gifts and joint development agreements above the revised threshold, and the impact is significant for deals below Rs 20 lakh. Buyers gain less paperwork at the registrar’s office or with the builder, and sellers such as senior citizens or low-income individuals selling small ancestral assets face less friction. But being exempt from quoting PAN does not remove tax obligations. Sellers must report capital gains in their returns, and both sides should keep documents to support the transaction.

Tusi Kumar, Partner at Singhania & Co, said voluntarily giving PAN helps accurate reporting in the Annual Information Statement and reduces later discrepancies. She advised keeping copies of PAN or Aadhaar, bank records and detailed sale agreements even for small deals, routing payments through bank transfers or cheques rather than cash, and retaining the agreement to sell, sale deed, stamp duty and registration receipts, municipal records, property tax receipts and correspondence with builders or authorities, with digital backups. Buyers should document the source of funds with bank statements and gift deeds, and sellers should preserve records of the original purchase and improvement costs to compute capital gains.

Kumar added that both buyer and seller must furnish PAN for the purchase or sale of immovable property if the transaction value exceeds Rs 20 lakh. If the circle rate valuation by the Stamp Valuation Authority exceeds Rs 20 lakh, PAN reporting is mandatory even if the actual transaction value is lower. Cash deposits or withdrawals of Rs 10 lakh or more in a financial year also require PAN, and where PAN is unavailable, Form 60 must be submitted. Buyers should also verify the seller’s credibility, title and records to avoid disputes or unexpected tax liabilities.