Selling property in India as a Non-Resident Indian (NRI) or Overseas Citizen of India (OCI) can be a complex process, especially when it comes to paperwork. One common question is: Can I sell property in India without a PAN card? Let’s break this down in a simple, conversational way to help you understand the rules and your options.

Why Is a PAN Card Important for Property Transactions?

A PAN (Permanent Account Number) card is essential for tax-related purposes in India. When you sell a property, the buyer is legally required to deduct TDS (Tax Deducted at Source) before paying you. This deduction is reported to the Income Tax Department, and the PAN card helps link the transaction to your tax records.

Without a PAN card, the buyer has to deduct TDS at a higher rate—usually 20%, compared to 1% for Indian residents or 20% (plus applicable surcharges) for NRIs with a PAN card. Additionally, without a PAN, you won’t be able to claim a tax refund or file your Income Tax Return in India, which could mean losing money unnecessarily.

Is It Legally Possible to Sell Without a PAN Card?

Yes, technically, you can sell property in India without a PAN card, but there are hurdles:

1. Higher TDS Deduction: As mentioned, TDS will be deducted at a higher rate, which could significantly reduce your net proceeds.
2. Compliance Issues for the Buyer: The buyer may face difficulties completing their part of the transaction, as they are required to submit your PAN while depositing the TDS with the government.
3. Tax Refund Challenges: Without a PAN, you won’t have a mechanism to file your returns and claim any refunds due to you.

What Are Your Options If You Don’t Have a PAN Card?

If you’re an NRI or OCI and don’t have a PAN card, here’s what you can do:

1. Apply for a PAN Card: This is the simplest and most recommended option. The process is straightforward, and you can apply online through the NSDL or UTIITSL website. Once you receive your PAN, the property sale can proceed smoothly.
2. Form 60: If you’re in a situation where obtaining a PAN is not feasible immediately, you can submit Form 60 to the buyer. This is a declaration stating that you don’t have a PAN. However, this doesn’t exempt you from higher TDS deductions.
3. Appoint a Tax Consultant: A tax consultant can help you navigate the legal and financial intricacies of selling property without a PAN. They might also assist in obtaining a PAN or advising on TDS implications.
4. Consider DTAA Benefits: As an NRI, you may benefit from the Double Taxation Avoidance Agreement (DTAA) between India and your resident country. While this doesn’t eliminate the need for a PAN, it may help reduce your tax liability.

Key Takeaways:

• While it’s legally possible to sell property without a PAN card, it’s far from ideal due to higher tax deductions and compliance challenges.
• Obtaining a PAN card is the most practical solution and will save you time, money, and potential legal headaches.
• If you’re unsure about the process, seeking advice from a tax or legal professional is always a good idea.

Selling property as an NRI or OCI can feel daunting, but with the right preparation and guidance, it doesn’t have to be a hassle. Remember, proper planning is the key to maximizing your returns and minimizing stress!