Know where all PAN is Required in a Property Transaction
May 16, 2019 Real Estate News
Permanent Account Number (PAN) is the ten digit number allotted by the Income Tax Department of India. The unique number is given out for taxation purpose. Hence, it is necessary to submit your PAN number whenever you carry out large transactions. Since property transactions involve a large sum of money, the requirement of PAN card is mandatory.
But what will happen if you still don’t have your PAN number? Will you be able to buy a property? We discuss everything about PAN card requirement below:
1. Plot purchase:
If the cost of the plot exceeds Rs 5 lacs, then the buyer is supposed to submit the PAN number. If the buyer is not a taxpayer, hence does not have a PAN number, the buyer may request the sub-registrar to register the property and submit a duly filled Form 60 along with address proof.
2. House purchase:
If the value of the house is more than Rs 50 lacs, then the buyer will have to submit their PAN card number. According to the law, the buyer will have to deduct the TDS at his side and submit the same for tax benefit. Without a PAN number, the buyer will not be able to deduct the TDS and will not get the advantage of tax benefit.
3. NRI buyers:
If the buyer is an NRI and does not pay taxes in India but is willing to buy a property in India, then they must have a PAN card. They can apply for the same and depending on the use of the property; the buyer can file for an exemption or income tax.
1. Plot sale:
If the value of the transaction exceeds Rs 5 lacs, the seller will have to submit the PAN number. If they are not a taxpayer, then one can request the sub-registrar to register the property and submit a duly filled Form 60 along with address proof.
2. House sale:
The buyer has to deduct the TDS from their end and with the absence of seller’s PAN number; the buyer will not be able to do the same. In this case, the buyer will have to deduct 20 percent TDS as compared to 1 percent if the PAN card is available. Also, the sellers have to pay the capital gains when they sell the property. Certain benefits are available for the seller, and the absence of the PAN card can hit them monetarily.
3. NRI seller:
For the NRI seller, the buyer has to deduct the TDS at 20 rpercent. The TDS deducted is the amalgamation of both capital gains and TDS. PAN card is necessary to enjoy the tax benefits that are for the NRI sellers.
But what will happen if you still don’t have your PAN number? Will you be able to buy a property? We discuss everything about PAN card requirement below:
Property Buyers
Even though it is not a law that every property buyer must own a PAN number, it is essential that they must own one. As a buyer, a PAN card come in handy in many cases.1. Plot purchase:
If the cost of the plot exceeds Rs 5 lacs, then the buyer is supposed to submit the PAN number. If the buyer is not a taxpayer, hence does not have a PAN number, the buyer may request the sub-registrar to register the property and submit a duly filled Form 60 along with address proof.
2. House purchase:
If the value of the house is more than Rs 50 lacs, then the buyer will have to submit their PAN card number. According to the law, the buyer will have to deduct the TDS at his side and submit the same for tax benefit. Without a PAN number, the buyer will not be able to deduct the TDS and will not get the advantage of tax benefit.
3. NRI buyers:
If the buyer is an NRI and does not pay taxes in India but is willing to buy a property in India, then they must have a PAN card. They can apply for the same and depending on the use of the property; the buyer can file for an exemption or income tax.
Property Seller
As a property seller, you need the PAN card number for taxation purpose.1. Plot sale:
If the value of the transaction exceeds Rs 5 lacs, the seller will have to submit the PAN number. If they are not a taxpayer, then one can request the sub-registrar to register the property and submit a duly filled Form 60 along with address proof.
2. House sale:
The buyer has to deduct the TDS from their end and with the absence of seller’s PAN number; the buyer will not be able to do the same. In this case, the buyer will have to deduct 20 percent TDS as compared to 1 percent if the PAN card is available. Also, the sellers have to pay the capital gains when they sell the property. Certain benefits are available for the seller, and the absence of the PAN card can hit them monetarily.
3. NRI seller:
For the NRI seller, the buyer has to deduct the TDS at 20 rpercent. The TDS deducted is the amalgamation of both capital gains and TDS. PAN card is necessary to enjoy the tax benefits that are for the NRI sellers.
Landlords
If the landlord makes more than Rs 2.4 lacs from the rental income, then the tenant is supposed to deduct 10 percent TDS from his side. In the absence of PAN card, the TDS deducted by the tenant is 20 percent. Even the NRI landlords, they will have to submit the PAN card details as they are earning the income through the rentals. To claim an exemption on the rental income, the landlord has to submit the PAN number.
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