Introduction
A PAN Card plays a crucial role in documenting financial transactions and helps the government in combating tax evasion. In the realm of property transactions, the PAN Card has been made mandatory for property registration, sales, purchases, and rentals. In this comprehensive guide, we will explore the various aspects of the PAN Card’s function in property registration and provide essential information for property buyers, sellers, and NRIs.
PAN Card for Property Registration
Any transaction related to immovable properties, such as buying or selling properties, renting out spaces or lands, and property registration, needs to be documented with a PAN Card. The PAN Card records financial transactions, allowing the Income Tax Department to monitor an individual’s income, investments, and borrowings efficiently. Providing PAN Card numbers is mandatory in the following scenarios:
- Agreements of sale or purchase of immovable assets exceeding INR 10 lakh.
- For transactions exceeding INR 50 lakh, buyers are expected to deduct 1% TDS and make payments to the Income Tax Department. Failure to comply may result in a 20% deduction.
Is PAN Card Mandatory for Buying and Selling Property?
Yes, a PAN Card is mandatory for all transactions related to the buying and selling of properties. The requirement aims to curb land fraud and fake arrangements.
Is e PAN Card Valid for Property Registration?
According to government notifications, electronically signed PAN Cards are valid for property registration. The amendments in the Income Tax Act and Rules enable e PAN Cards with verified QR codes containing demographic and biometric data to function like regular PAN Cards.
Documents Required for Property Registration
The general process of property registration involves submitting deeds and documents through online portals and paying stamp duties. The required documents include:
- Ownership proof, including a copy of the old sale deed.
- Identification proof, such as a driving license, Aadhaar card, or any government-issued identity card.
- No Objection Certificate.
- Identity proof of witnesses (if any).
- Detailed illustration and visual representation of the immovable property.
Additionally, quoting a Permanent Account Number (PAN) is mandatory for any property deal worth over INR 10 lakhs. By providing their PAN, property owners can also enjoy a 5% tax deduction on rented properties above INR 50,000, while the absence of a PAN may lead to a 20% tax deduction.
Does an NRI Need a PAN Card in Property Registration?
Although it is not mandatory for NRIs to obtain special permission to buy immovable property, they may need to provide a PAN Card for property transaction documentation. NRIs also require a valid Indian Passport or a document proving their Indian origin, or an Overseas Citizen of India (OCI) Card. Additionally, NRIs need a power of attorney to represent themselves in case of absence for performing transactions.
Frequently Asked Questions (FAQs)
Can I Sell a Property Without a PAN Card?
No, you need to quote your PAN Card to sell your property. Both the buyer and seller must present their respective PAN cards for any agreement above INR 10 lakhs.
Is a PAN Card Mandatory for a Home or Property Loan?
Yes, a PAN card is necessary to avail of a home loan or a property loan along with other identification documents, such as an Aadhaar card, driving license, or any government-issued identity cards.
Is PAN Card Mandatory for Rent Agreements?
Yes, it is mandatory to provide the PAN card details of the landlord to avail of tax benefits over HRA (Home Rent Allowance). The government has made this a strict rule to prevent tenants from evading taxes through the submission of fake rent receipts.
Conclusion
Understanding the role of a PAN Card in property registration is essential for property buyers, sellers, and NRIs. The PAN Card helps facilitate transparent financial transactions and contributes to curbing tax evasion. Whether it is buying, selling, or renting properties, complying with the PAN Card requirements ensures legal compliance and supports the government’s efforts to maintain transparency in the real estate sector. With the right knowledge and documentation, individuals can smoothly navigate the process of property transactions while adhering to the PAN Card mandates.