TheIncome Tax Departmenthas released theDraft Income Tax Rules, 2026as part of a broader overhaul under the proposed new tax framework. One key change is a proposed increase in the threshold for mandatoryPermanent Account Number (PAN)reporting in property transactions. Under current rules, PAN must be quoted when buying or selling immovable property worth more than₹10 lakh. The draft rules seek to double this limit to₹20 lakh, meaning that property deals below ₹20 lakh may no longer require PAN disclosure if the proposal is finalised and notified — expected to take effect fromApril 1, 2026.
The rationale behind this revision is to align compliance requirements with today’s real estate market conditions, where even modest properties often exceed the old threshold. Raising the limit could simplify documentation and reduce paperwork for smaller buyers — particularly in tier-2 and tier-3 cities where property values tend to be lower. However, PAN will still be mandatory for higher-value transactions (₹20 lakh and above), helping authorities track significant transfers and monitor tax compliance. The draft also clarifies that certain arrangements, such as gifts and joint development agreements involving property, will still fall under PAN reporting rules if their value exceeds the specified limit.
Stakeholders and taxpayers can offer feedback on the draft rules before they are finalised, but if approved, the new compliance relief will bring easier processing for lower-value property deals from the start of the new financial year.
