Draft Income Tax Rules 2026 Propose Major Changes to PAN Quoting Requirements
The Income Tax Department has recently unveiled the draft income tax rules for 2026, aligning with the New Income Tax Act. These proposed regulations introduce several significant modifications, particularly concerning the mandatory quoting of Permanent Account Number (PAN) cards in various financial transactions.
Key Revisions in PAN Quoting Obligations for Property Deals
One of the most notable changes in the draft rules pertains to the scope and threshold for PAN quoting in transactions involving the purchase or sale of immovable property. Under the current framework, PAN must be furnished for property transactions exceeding Rs 10 lakh in value. The new proposal raises this threshold to Rs 20 lakh, effectively doubling the limit.
Furthermore, the draft rules broaden the compliance net to include additional scenarios such as gifts and joint development agreements. This expansion aims to enhance oversight and transparency in areas where informal transactions have historically been prevalent.
Expert Insights on the Proposed Changes
Richa Sawhney, Partner - Tax at Grant Thornton Bharat, commented on the rationale behind the revised threshold. "This shift recognizes the substantial increase in property prices across the nation and underscores the government's intent to streamline compliance for smaller value transactions. The specific inclusion of gifts and joint development agreements suggests a perceived need for increased oversight in these domains," she explained in an interview with TOI.
Atul Monga, CEO & Co-Founder of BASIC Home Loan, highlighted the potential benefits for entry-level property buyers. "Increasing the threshold could make transactions slightly more frictionless, especially in Tier 2 and Tier 3 markets where property values are typically lower. This step should provide relief for small-ticket transactions, as deals below the Rs 20 lakh limit would no longer require PAN quoting at the time of registration," he noted.
Implications for Transparency and Compliance
Monga emphasized that the draft rules signal a push towards greater traceability and transparency in high-value real estate transactions. "Larger transactions will remain within the reporting framework, requiring mandatory PAN quoting. By retaining this requirement for high-value deals, the government builds a more robust audit trail and encourages cleaner documentation," he stated.
He added that for salaried taxpayers and genuine homebuyers, this should not pose an issue. "Clearly linking transactions to PAN improves credibility in property dealings and reduces the likelihood of future tax scrutiny, provided all paperwork is in order. For fintech platforms and lenders, stricter PAN compliance in high-value transactions can enhance underwriting accuracy by allowing property dealings to be matched with verified financial records," Monga elaborated.
Caution and Future Outlook
It is important to note that these proposals are still in the draft stage and currently under consultation. "The final contours may evolve before implementation. However, the intent is clear: to formalize the ecosystem and avoid unnecessary compliance burdens on smaller participants in the market," Monga concluded.
The draft income tax rules 2026 represent a significant step towards modernizing tax compliance mechanisms, balancing ease of doing business with enhanced oversight in critical sectors like real estate.
