Why PAN Is Required for Property Transactions
The Income Tax Department uses PAN to track high-value transactions — property purchases are a key category. Every property sale above ₹10 lakh is reported by the Sub-Registrar to the Income Tax Department. The buyer's and seller's PAN allows the IT Department to match transaction data with tax returns and identify unexplained wealth or income.
| Transaction | PAN Requirement | Without PAN |
|---|---|---|
| Property purchase >₹10 lakh | Mandatory for both buyer and seller | Transaction flagged; TDS at 20% instead of 1% |
| TDS via Form 26QB | Both buyer and seller PAN mandatory fields | Form 26QB cannot be filed — TDS compliance impossible |
| Property registration | PAN required by Sub-Registrar for transactions >₹10L | Registration may be refused or flagged |
| Home loan | PAN mandatory for all home loan applications | Home loan cannot be processed without PAN |
| Capital gains ITR filing | PAN required to file ITR and claim exemptions | Cannot file ITR — cannot claim Section 54 exemption |
PAN for NRI Property Transactions
NRI PAN Requirements
- NRI buying property: PAN is mandatory for purchase above ₹10 lakh — apply via Form 49A (online at incometaxindia.gov.in or NSDL/UTIITSL)
- NRI selling property: PAN required for buyer to deduct TDS correctly — without seller PAN, buyer must deduct 20% instead of applicable rate
- NRI receiving rental income: PAN required to receive TDS deduction credits and file ITR
- Repatriation (Form 15CA/15CB): PAN required for filing Form 15CA online
- Apply in advance: PAN processing takes 2–4 weeks — apply well before the planned transaction
Related Terms
Frequently Asked Questions
Yes. PAN is mandatory for all property transactions above ₹10 lakh. Both buyer and seller must quote PAN. Without PAN, TDS is deducted at 20% (Section 206AA) instead of 1%, Form 26QB cannot be filed, and the Sub-Registrar may flag or refuse the registration. For home loans, PAN is mandatory regardless of transaction amount.
If the seller does not provide PAN, the buyer must deduct TDS at 20% of the full sale consideration under Section 206AA — instead of the normal 1%. This significantly increases the TDS deduction. The seller then needs to file ITR to claim a refund of excess TDS. Both parties face income tax scrutiny. PAN should be obtained well before any property transaction.
NRI can apply for PAN (Form 49A) before the transaction — it is mandatory for property purchases above ₹10 lakh. Without PAN, TDS at 20% applies and Form 26QB cannot be processed. NRI PAN applications are processed through NSDL or UTIITSL — allow 2–4 weeks. The PAN can also be used for ITR filing to claim Section 54 exemption or TDS refund.
Form 60 is a declaration for individuals who do not have PAN but need to make certain financial transactions. However, it is NOT accepted as PAN substitute for property transactions above ₹5 lakh. For property purchases above ₹10 lakh, PAN is mandatory — Form 60 cannot replace it. Anyone planning a property transaction must obtain PAN well in advance.
For resident Indians, PAN must be linked with Aadhaar — unlinked PANs have been deactivated by the Income Tax Department. An inactive PAN cannot be used for Form 26QB, ITR filing, or bank transactions. If your PAN is inactive, link it with Aadhaar immediately (with late fee payment). For NRIs without Aadhaar, there is an exemption — NRI PAN does not need Aadhaar linking.