From mint · Jocelyn Fernandes · · 1m 30s
Investing in property? Avoid tax notices with correct PAN and funds
How to avoid income tax notices when buying property with correct PAN and funds.
In brief
How to avoid income tax notices when buying property with correct PAN and funds. Property buyers must retain proof of funds, sale deeds, and transaction records to prevent tax notices from income tax authorities. Originally reported by mint.
Property registrations on a single PAN
Legal experts confirm income-tax laws set no numerical limit on properties a person can own under one PAN.
Threshold to report property transactions
Purchasers must report transactions exceeding ₹ 30 lakh via SFT or ₹ 50 lakh with TDS deduction.
SFT reporting requirements
For immovable property transactions over ₹ 45 lakh, registration authorities must report to income tax.
TDS deduction rules
Buyers must deduct 1% TDS on immovable property purchases exceeding ₹ 50 lakh.
Documentation checklist
Retain registered sale deed, stamp duty records, source of funds evidence, payment proof, and bank statements.
Why tax notices occur
Tax authorities may issue notices if source of funds is unclear, PAN details are wrong, or TDS is not deducted.
Consequences of unexplained funds
Unexplained property purchases can lead to severe tax penalties and income tax liabilities.
Action steps for buyers
File reply within stipulated time with supporting documents if tax notice is received.
Key documentation for property
Ensure correct PAN and identity details in sale deed, use traceable banking channels, and comply with TDS rules.
The bottom line
Property buyers must retain proof of funds, sale deeds, and transaction records to prevent tax notices from income tax authorities.
