Income tax on property buying: Over ₹30 lakh deal? Experts suggest what to report in realty purchases to avoid taxmen

An Income Tax Department survey last week found discrepancies in records of near 25,000 properties worth around ₹55,000 crore, including the alleged use of the same PAN number in multiple registrations over two years.

High-value property transactions in Gurugram's Badshahpur tehsil are now under the scanner by the I-T Department, Chandigarh, which has constituted a seven-member team to probe records, PTI reported citing an official.

Amid this, we asked experts how many properties can be registered on a single PAN and at what threshold must property transactions be reported to the I-T dept. Here's what they suggested…

According to Amit Ganatra, Executive Director at Khaitan & Co, there is no specific numerical limit under the Indian Income tax Act / Rules on how many properties a person can buy or register using the same PAN.

“Any person can purchase multiple residential, commercial, or other properties under his PAN provided source of funds is legitimate and genuine and all the applicable rules are complied. Irrespective of number of properties held, an individual can show only two properties as “self-occupied property” and balance properties would have to be considered as “deemed to be let out” for income tax purposes,” he noted.

Dinkar Sharma, Company Secretary and Partner at Jotwani Associates concurred, adding that it is possible for an individual to own multiple residential or commercial properties, “as long as the transactions are bona fide and the source of funds used for the purchase is explainable”.

“A PAN is a unique tax identification number assigned to a taxpayer. It helps the Income Tax Department to link property transactions with a person’s income-tax returns and other financial information. Hence, it is perfectly legitimate for a person to use the same PAN to purchase multiple properties,” he said.

Sharma further noted that the total number of property transactions made through a particular PAN cannot be said to be indicative of tax evasion. “The actual point here is whether the transaction was genuine, the names of the seller and buyer were recorded correctly, and the source of the amount spent in buying the properties could be explained,” he added.

Sharma cited the Statement of Financial Transactions (SFT) reporting requirements, which state that a purchaser or vendor of immovable property “should get such a transaction reported by the concerned registration authority when the value of the transaction or the stamp duty value is ₹30 lakh or more”.

“It is the duty of the registration authority to report such transaction. This does not imply that the person purchasing immovable property needs to get his own report made if the value of immovable property is ₹30 lakh or more,” he added.

Sharma further noted that there is another provision regarding the tax deducted at source (TDS). “In case of purchase of any immovable property, other than specified agricultural land, from a resident vendor, the person purchasing such immovable property (buyer) will normally have to make the deduction of TDS at 1% if the value of sale consideration or stamp duty value is ₹50 lakh or more.”

Ganatra provided a checklist according to the new I-T Rules (applicable for FY 2026-27 onwards) where PAN is required, as follows:

• For purchase, gift, sale or joint development agreement (JDA) in respect of immovable property exceeding ₹20 lakh,
• SFT reporting by Registrar or Sub-Registrar for purchase, gift, sale or JDA in respect of immovable property exceeding ₹45 lakh,
• Deduction of TDS on purchase of immovable property exceeding ₹50 lakh,
• Reporting of immovable property in ITR (Schedule AL) in case total income of individual exceeds ₹1 crore,
• Reporting of properties in Schedule – HP (House Property) of ITR (either as self-occupied or deemed to be let out).

“Failure to quote PAN, report transactions or non-deduction of TDS entails monetary penalty and interest exposure,” he added.

Ganatra noted that as a matter of abundant precaution, an individual should maintain sufficient documentation for every immovable property transaction. Such documentation shall include registered sale deed, stamp duty records, evidence regarding source of payment, payment evidence, bank statements, buyers PAN, proof of ownership of property by the seller, reconciliation of income tax records, loan documents etc.

Jocelyn Fernandes is a journalist and editor with nearly 13 years of experience covering the business, corporate, economy and markets beats in news.<br> As chief content producer for around three years at Livemint (Hindustan Times), Jocelyn publishes breaking stories, explainers, features and live blogs on a range of business and economy topics, including the Budget, corporate developments, stock markets, income tax, money and personal finance, cryptocurrency, government policy, impact of US tariffs, international developments and more.<br> Jocelyn's writing philosophy is focused on delivering news in an accurate and accessible format for readers. She thus focuses her news coverage on explainers and FAQs in order to breakdown business, corporate, economic, and policy topics that are of importance to everyday readers.<br> She holds a Bachelors in Mass Media (BMM) and Post Graduate Diploma (PGD) in Journalism and Communication and has previously written for online business and markets news site Moneycontrol (Network18), Business-to-business (B2B) trade publications — the industry magazines Power Today and Solar Today (ASAPP Media), and the national news agency United News of India (UNI).<br> Outside of work, Jocelyn keeps up-to-date with local and international news, enjoys reading fiction books, novels and short stories, and enjoys movies, travelling and art. <br> She can be found on X and LinkedIn, and reached by email: <a href="jocelyn.fernandes@htdigital.in">jocelyn.fernandes@htdigital.in</a> <br> X/ Twitter handle: <a href="https://x.com/scribeJocelyn">@scribeJocelyn</a> <br> LinkedIn: <a href="https://in.linkedin.com/in/jocelyn-fernandes-journalist">LinkedIn</a>

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