From April 1, 2026, significant income tax changes have come into effect in India, impacting individuals, businesses, and property transactions. The Central Board of Direct Taxes (CBDT) has introduced updated forms for Permanent Account Number (PAN) corrections and revised the threshold for PAN requirements in property deals. These changes aim to simplify tax compliance, enhance transparency, and encourage broader participation in the housing market.
Until now, even relatively modest purchases required PAN details to be submitted at the time of registration. That often became a sticking point. In smaller towns especially, documentation gaps can delay deals that are otherwise ready to close.
Take a simple example; A buyer looking to purchase a ₹15 lakh plot on the outskirts of a tier-3 city would earlier have to ensure PAN compliance before the transaction could go through. If the paperwork wasn’t in place, the deal could get pushed by days, sometimes weeks. With the new ₹20 lakh threshold, that same transaction can move ahead without that additional step, making the process quicker for both sides.
For buyers, particularly first-timers, this removes a layer of anxiety. Many of them are not regular participants in formal financial systems and tend to find compliance-heavy processes intimidating. A simpler requirement lowers the entry barrier, even if only slightly.
Sellers, too, could see some relief. In markets where low-value land parcels or older properties are common, deals are often time-sensitive. Fewer documentation checks at the lower end mean less back-and-forth and faster closures.
Importantly, nothing changes on the tax front. If there are gains from a sale, they still need to be declared and taxed. The government is not easing taxation here, just the process around smaller transactions.
Introduction of New PAN Correction Forms
The CBDT has issued two new forms for updating PAN details:
- PAN CR-01 – Applicable to individuals.
- PAN CR-02 – Applicable to non-individuals such as companies, firms, and other entities.
These forms allow taxpayers to correct details linked to their PAN, including name, date of birth, and other key information. The goal is to standardize the correction process, reduce errors, and make it easier for taxpayers to maintain accurate records. Accurate PAN information is crucial for various financial activities, including filing income tax returns, property registrations, and banking operations.
Key points about filing PAN correction forms:
- Offline Filing: Taxpayers can submit forms at PAN service centers managed by UTI Infrastructure Technology and Services Limited and Protean eGov Technologies.
- Online Filing: Forms can be submitted through official digital portals, enabling faster processing and easier tracking.
- Guidelines Provided: CBDT has issued detailed instructions to standardize corrections and avoid discrepancies.
Experts note that the new forms will help reduce delays in financial transactions caused by incorrect PAN details. The changes also align with the government’s push to digitize and simplify compliance procedures.
Revised PAN Requirement Threshold for Property Transactions
A major highlight of the April 2026 changes is the increase in the PAN requirement threshold for property deals. Earlier, PAN was mandatory for most property transactions, even smaller ones, creating administrative challenges. Under the new rules:
- PAN is not required for property transactions up to ₹20 lakh.
- PAN remains mandatory for transactions above ₹20 lakh.
This adjustment eases compliance for smaller property deals, benefiting first-time homebuyers and small investors while ensuring oversight of higher-value transactions.
This adjustment eases compliance for smaller property deals, benefiting first-time homebuyers and small investors while ensuring oversight of higher-value transactions. It simplifies property registration procedures, reduces paperwork for lower-value transactions, and makes property ownership more accessible. First-time buyers, in particular, stand to benefit from the reduced compliance burden, potentially encouraging long-term investment in residential properties.
Real estate experts have welcomed this revision.
New Additions and Updates
Tighter HRA disclosure norms and revised tax rules will impact tenants and homebuyers. Taxpayers claiming HRA must now disclose their relationship with the landlord, while renters in Bengaluru, Hyderabad, Pune, and Ahmedabad can avail a higher 50% exemption cap.
- PAN has become mandatory for both buyer and seller in property deals exceeding ₹20 lakh. The rule also covers gifts and joint development agreements.
- For NRI transactions, TDS can now be deposited using the buyer’s PAN, eliminating the need for one-time TAN registration and easing compliance for individual homebuyers.
- Pre-construction interest on self-occupied homes is now subsumed within the overall ₹2 lakh annual deduction limit on home loan interest.
The introduction of mandatory disclosure of landlord relationships through Form 124 raises the compliance bar, particularly where rent is paid to relatives. This means taxpayers can still rent from relatives or parents and claim HRA, but must disclose the relationship and provide proper documentation, including rent agreements, bank transfer evidence, PAN details of the landlord, and reasonable rent benchmarking.
The expansion of the 50% HRA exemption to Bengaluru, Hyderabad, Pune, and Ahmedabad directly affects take-home income, particularly for taxpayers who were earlier constrained by the 40% cap despite paying higher rents. For a monthly basic salary of ₹1 lakh, the exemption limit increases from ₹40,000 to ₹50,000, potentially translating into annual tax savings of around ₹35,000–₹40,000.
Both buyer and seller must furnish PAN for property deals exceeding ₹20 lakh, including property transfers through gifts and joint development agreements. If the Stamp Valuation Authority values the property above ₹20 lakh, PAN reporting is mandatory regardless of the actual transaction value.
By allowing TDS on NRI property sales to be deposited using the buyer’s PAN, the Finance Ministry has simplified compliance while keeping tax collection intact. Pre-construction interest must now be claimed in five equal annual installments starting from the year of completion, and cannot be stacked to push total interest deduction beyond the ₹2 lakh annual ceiling.
This adjustment is expected to simplify property registration procedures, reduce paperwork for lower-value transactions, and make property ownership more accessible. First-time buyers, in particular, stand to benefit from the reduced compliance burden, potentially encouraging long-term investment in residential properties.
Real estate experts have welcomed this revision.
What expert says:
Mr. Rajat Bokolia, CEO of Newstone, states, "The revision of PAN applicability for property transactions above ₹20 lakh under the Income Tax Rules, 2026, reflects a calibrated policy shift aimed at balancing compliance with market accessibility. By increasing the threshold from ₹10 lakh, the government has reduced procedural friction for smaller transactions, especially benefitting affordable housing buyers and semi-urban markets. Simultaneously, keeping mandatory PAN requirements for higher-value deals improves transaction traceability and reduces unaccounted cash flows. This step is anticipated to strengthen transparency and formalization throughout the mid and premium real estate segments while facilitating transactions at the lower end."
Mr. Rahul Singla, Director, Mapsko Group, believes, “The removal of the mandatory PAN requirement for property transactions up to ₹20 lakh is a progressive and welcome move, especially for small buyers and first-time investors, as it significantly simplifies the transaction process. In a country like India, where a large portion of the population falls outside the tax bracket, this reform is expected to encourage wider participation in real estate and enable individuals to channel their savings into meaningful and long-term assets.
As a Developer, we think that in the upcoming years, such policy initiatives will be essential to improving accessibility, boosting buyer trust, and promoting equitable and sustainable growth throughout the real estate industry".
Mr. Pushpender Singh - Managing Director, JMS Group says,, "Under the Income Tax Rules, 2026, the PAN applicability level for real estate transaction was revised from ₹10 lakh to ₹20 lakh. This is a practical move that would improve transparency in higher-value deals while making compliance easier for smaller ticket-buyers. The step is expected to boost first-time homebuyers and increase liquidity in the affordable housing market by reducing the documentation requirement for deals under ₹20 lakh. However, for mid-to-premium segments, mandatory PAN quoting will continue to enhance traceability, curb tax evasion, and formalise the sector further. All things considered, this reform achieves a balance between transactional convenience and regulatory supervision."
Mr. Rupam Dey, Head- Marketing Communications and Brand, Hubtown, says "For the real estate industry, raising the PAN requirement threshold from ₹10 lakh to ₹20 lakh is a very beneficial and welcome measure. Small and middle-class buyers in particular will benefit greatly from this adjustment since it will make it easier for them to make decisions about real estate. In addition to making the purchasing and selling process quicker and simpler, it will increase market openness and confidence."
This kind of approach is not new. Over the past few years, there have been several attempts to simplify processes rather than tighten them. Digitised land records in some states and faster online registrations have already shown that when procedures are easier, more people are willing to transact formally.
The same logic seems to be at play here. The ₹10–20 lakh bracket covers a large number of deals in smaller cities and peripheral areas. Even a minor reduction in friction in this segment can have a ripple effect. It may not lead to an immediate spike in headline numbers, but it could quietly improve deal velocity where it matters most, at the bottom of the market where volumes are built. The income tax changes signify a major step towards simplifying compliance and improving the ease of doing business.
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