Draft Tax Rules May Relax PAN Requirement In Some Property Deals

The draft Income Tax Rules, 2026, indicate a possible rethink of how Permanent Account Number (PAN) details are reported in property transactions, including a higher value threshold and clearer disclosure norms for certain types of real estate arrangements, according to a recent report by the "Times of India." While the proposals are still under consideration, they hint at an attempt to make routine transactions less cumbersome without loosening oversight where substantial money is involved.

Why The Threshold May Change

For years, quoting a PAN has been compulsory for property deals above Rs 10 lakh. That figure was set when property prices, even in large cities, were significantly lower than they are today. In many urban and semi-urban markets now, even a modest flat or a small plot can cross that limit easily.

Raising the threshold to Rs 20 lakh, as proposed, seems to acknowledge this price shift. For smaller buyers, especially those purchasing their first home or dealing with inherited family property, it could mean fewer formal steps. It may not drastically change the buying process, but even small reductions in paperwork are usually welcomed by buyers already juggling loan approvals, legal checks, and registration formalities.

That said, experienced tax practitioners often point out that documentation habits should not depend purely on regulatory limits. Property transactions tend to resurface financially, during resale, refinancing, inheritance transfers, or tax scrutiny, sometimes many years later. Having proper records rarely hurts.

Expanded Reporting For Other Arrangements

The draft framework also appears to cast a wider net over certain types of property transactions that historically have not followed uniform reporting practices. These include property transfers through gifts and some joint development agreements between landowners and developers.

These kinds of property deals aren’t unusual. Homes are often passed within families without a formal sale, and redevelopment projects frequently involve landowners partnering with builders instead of outright transfers. When paperwork isn’t consistent, questions can crop up later, about valuation, tax liability, or even who exactly holds what share.

Stronger disclosure expectations could help tidy up that space. Clearer reporting not only assists tax authorities but can also reduce disputes among stakeholders, whether family members, developers, buyers, or lenders. Banks and housing finance companies, in particular, tend to prefer clean documentation before sanctioning loans.

Real Estate Compliance Steadily Evolving

Even though the rules are still in draft form, they fit into a broader trend that has been unfolding gradually. Real estate transactions are becoming more documented, more traceable, and more data-linked than they were a decade ago. Digitised land records, tighter financial reporting, and closer tax scrutiny have all contributed to this shift.

For buyers and sellers, the takeaway is fairly straightforward. Regulatory thresholds may move up or down over time, but careful documentation remains the safest strategy. Keeping payment trails clear, agreements properly recorded, and valuations realistic helps avoid complications later.

If these draft proposals eventually become part of the final rules, smaller transactions may face slightly lighter compliance, while larger or more complex deals remain firmly monitored. That balance, convenience without compromising transparency, appears to be the underlying direction policymakers are aiming for as India’s property market continues to formalise.