India’s property registration and documentation process may become significantly more compliance-heavy under a draft framework introduced for the Income Tax 2026. The government has proposed expanding the mandatory quoting of Permanent Account Number (PAN) details across specified real estate transactions, with the stated goal of improving traceability and reducing unreported cash components in high-value property deals. The draft provisions are linked to the existing Income Tax Act 1961 framework, meaning the changes would build on rather than replace current compliance obligations. The proposal is currently open for stakeholder feedback before being formally notified, making this an active consultation phase rather than a concluded regulatory change.
What the Draft Proposes
The core of the proposal involves widening the circumstances under which individuals involved in property transactions are required to furnish PAN information during documentation and reporting. Under the current framework, PAN disclosure in real estate deals is already required above certain transaction thresholds. The draft Income Tax 2026 framework proposes making these requirements more consistent and comprehensively closing gaps where PAN details could previously be omitted or selectively reported. By tightening PAN disclosure norms, authorities aim to create a stronger audit trail across property deals, making it harder to underreport transaction values or introduce undisclosed cash components during registration.
The Broader Regulatory Context
This proposal does not exist in isolation. It is part of a wider government effort to modernise tax administration ahead of the 2026 regulatory rollout. A process that includes digitising records, strengthening TDS compliance on property purchases, and improving data-sharing between registration authorities and the Income Tax Department. Real estate has historically been one of the sectors most associated with cash-based undervaluation, and successive regulatory interventions from mandatory TDS on property purchases above ₹50 lakh to RERA registration requirements have progressively tightened the compliance environment. The PAN expansion proposal follows this trajectory.
What It Means for Buyers and Sellers
If finalised, the revised rules will make accurate tax identification a non-negotiable step at multiple points in a property transactions not just at the time of registration. For buyers, this reinforces the importance of ensuring all transaction components are fully documented and PAN-linked, particularly in deals involving multiple payment stages or seller entities. For sellers, incomplete PAN compliance could create complications during documentation or trigger scrutiny during post-transaction audits.
Practically, buyers and investors transacting in high-value segments should ensure their tax records are in order well before initiating a deal, rather than treating compliance as a post-registration formality. Engaging a qualified chartered accountant during the due diligence phase not just at the time of registration will become increasingly important if the draft provisions are notified as proposed.
