Summary of this article
Draft rules raise PAN threshold for property deals to Rs 20 lakh
Move may ease paperwork, especially in tier-II and III markets
Title checks, Section 50C norms still apply despite lower compliance
Experts advise continued PAN disclosure for traceability and loans
From April 1, 2026, property buyers in India may no longer need a Permanent Account Number (PAN) for deals below Rs 20 lakh under the draft income tax rules, the Income Tax Department has said. The proposal eases compliance for small transactions while tightening reporting elsewhere. The Income Tax Department’s move could reshape paperwork norms for entry-level homebuyers and boost activity in low-value property markets nationwide. At present, this threshold is Rs 10 lakh.
What It Means
The removal of the PAN requirement for sub-Rs 20 lakh transactions is more likely to reduce compliance friction than dramatically boost demand. However, it is definitely going to impact property transactions in tier-II and tier-III cities.
Says Grahita Agarwal, senior associate, B. Shanker Advocates LLP: “Entry-level housing demand is primarily driven by credit access, interest rates, and affordability, not documentation alone. However, in smaller towns and peri-urban markets, easing paperwork may accelerate decision-making and formal registrations. Psychologically, a lighter compliance burden can improve transaction velocity.”
Any relaxation in identity-linked reporting carries a theoretical risk of under-reporting or fragmented transactions. That said, property transfers remain traceable through registration records, stamp duty data, and banking channels. Adds Agarwal: “If reporting obligations are simultaneously strengthened for higher-value deals, the net compliance architecture may remain intact. The key will lie in robust data integration across registries and tax systems.”
What First-Time Buyers Should Keep In Mind
First-time buyers should treat the relaxation as a procedural ease, not as a relaxation of tax or title discipline. Even if PAN disclosure is not mandatory under Rule 114B, Section 50C of the Income-tax Act, 1961 shall still apply. “Buyers must therefore ensure that full payment is made through valid channels, the declared value matches stamp duty valuation norms and proper title verification is completed. Less paperwork does not protect against title defects, valuation disputes, or future tax scrutiny,” says Madhura Samant, managing partner, Elarra Law Offices.
Adds Samant: “Buyers must, therefore, ensure that full payment is made through valid channels, the declared value matches stamp duty valuation norms, and proper title verification is completed. Less paperwork does not protect against title defects, valuation disputes, or future tax scrutiny.”
So, even if it is not mandatory, it is recommended that one discloses one’s PAN. That would mean that the transaction is traceable and will also help if one plans on taking a loan against the property.
