In India, if an individual wants to proceed with any real estate property transactions, then it is mandatory for them to provide their PAN (Permanent Account Number) Card details. For important financial matters like buying or selling a land, house, or flat and also during property registrations, PAN Card is one of the most important documents required for the validation of the process. Since real estate deals with a varied range of immovable property, one can read the following list to understand in which cases the use of PAN Card is made compulsory by the Government of India.
In Which Cases Pan Card Is A Must?
To control any fraudulence as well widen the tax base, the Indian government has made it compulsory to quote PAN Card if an individual wants to proceed with the following kind of property transactions in India.
- Purchase or Sell immovable property above 10 lakh - The registration for a sale or purchase of a property whose value is above 10 lakh is not possible without both the seller and the buyer quoting their PAN Cards.
- To claim TDS from rental income - For rentals of all types of immovable property, tenants can enjoy a 5% TDS by providing their PAN details on rents above Rs.50,000. In case, the landlord fails to furnish their PAN card; the TDS rises to 20%.
- To claim TDS is the buyer spends more than 50 lakh to purchase an immovable property - If a residential Indian wants to purchase a land whose value exceeds 50 lakh, they can claim a TDS of 1% provided they can furnish their PAN details during such claims.
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Do Nris Need Pan Card For Property Registration In India?
PAN Card is not mandatory for an NRI as they are non-residential Indians with Indian passports; especially if they do not plan to invest money into any business in India.
However it is mandated by the government to have a PAN Card if,
- An NRI wants to invest in mutual funds in India.
- They have a source of income in India that is taxable.
- The non-residential Indian wants to transfer the funds received from the property transactions in India to their NRE or NRO accounts. To buy a property they do not necessarily need a PAN Card as per rule 114C. Since the process of getting a PAN Card is easy, it is often recommended to get one to ease the property registration process. Alternatively, a non-residential Indian can also provide Form 80 during the buying of a flat, house, or land and the registration of such sales or purchase. In case of selling a property or possession of any immovable property, an NRI has to pay the tax levied on the accrued income for which they also need to quote their PAN Card.
However, since NRIs are not mandated to provide their PAN Card details to proceed with any kind of property registration, the Government of India also restricts them from purchasing any farmland, plantation, or agricultural property in India.