Can an NRI/OCI Sell Property Without a PAN Card ?

by admin NRI Property Management, the luxia

Yes, an NRI (Non-Resident Indian) or OCI (Overseas Citizen of India) can sell property in India without a PAN card, but there are important tax and compliance implications to consider:

1. PAN Card Requirement for Tax Deduction (TDS)

  • Under Indian tax laws, when an NRI sells a property, the buyer must deduct TDS (Tax Deducted at Source) at 20% (plus surcharge and cess) on long-term capital gains, or 30% on short-term gains.

  • If the seller does not have a PAN, the TDS can be deducted at a higher rate of 20% or even up to 30% under Section 206AA of the Income Tax Act.

  • Therefore, not having a PAN can result in higher tax deduction and difficulty in claiming refunds or filing returns.

2. Repatriation of Sale Proceeds

  • For NRIs/OCIs to repatriate (send back) sale proceeds to their foreign account, they must provide proof of tax compliance — this includes filing income tax returns, which requires a PAN.

  • Without a PAN, repatriation through the RBI route becomes difficult.

3. Property Registration

  • While PAN is not mandatory for property registration itself, if the sale value exceeds ₹10 lakh (which is usually the case), both buyer and seller are expected to quote PAN under the Income Tax Rule 114B.

  • In such cases, the absence of PAN may lead to delays or objections during registration.

4. Alternative Option: Apply for PAN

  • NRIs/OCIs can easily apply for a PAN card online via the NSDL or UTIITSL portals.

  • It’s strongly recommended to obtain a PAN before selling property to ensure smooth tax compliance, registration, and repatriation.

Summary: While it is technically possible to sell property without a PAN card, it is not advisable due to higher TDS, compliance challenges, and issues with repatriating funds. Getting a PAN is the most practical step.