1. Through PAN-Based Transaction Reporting
Every land transaction exceeding prescribed thresholds requires mandatory quoting of the Permanent Account Number (PAN) by both buyer and seller. This information is captured in:
- Sale deeds registered with Sub-Registrar Offices
- TDS forms such as Form 26QB for transactions over ₹50 lakh
- Annual Information Statement (AIS) generated by the Income Tax Department
These PAN-linked entries allow the department to monitor high-value property deals across India.
2. Form 26QB and TDS Mechanism
For property transactions exceeding ₹50 lakh (non-agricultural land), the buyer must:
- Deduct 1% TDS under Section 194-IA
- Deposit the TDS using Form 26QB, which includes full details of the seller, buyer, transaction amount, and property address
The TDS credit gets reflected in the seller’s Form 26AS, creating a digital trail for the Income Tax Department to track the sale.
3. Integration with Sub-Registrar Offices and Stamp Duty Records
The Income Tax Department receives property transaction data through:
- State registration departments, which report all registered sales and deed transfers
- Stamp duty and registration charges paid during the transaction, which are compared to declared sale consideration
This data is cross-referenced to detect undervaluation or suppression of transaction amounts.
4. Annual Information Statement (AIS) and Statement of Financial Transactions (SFT)
Large land transactions are part of the Statement of Financial Transactions (SFT) filed by:
- Sub-Registrars
- Banks, if large amounts are transacted via RTGS, cheques, or loans
- Other reporting entities such as NBFCs or co-operative banks
These entries are consolidated into the AIS, which the department uses to detect non-reporting or under-reporting of income from land sales.
5. Property Tax and Mutation Record Monitoring
Changes in land ownership and municipal property records, such as:
- Mutation entries in revenue department databases
- Revised property tax filings post-sale
Are also accessible to tax authorities and used to track ownership transfers and related income disclosures.
6. Information from Financial Institutions and Registrars
In many cases, if the land sale involves:
- Bank loan settlements or disbursals
- Payments through digital channels exceeding reporting limits
Then banks are obligated to report these under the Income Tax Rules via Form 61A, making transactions traceable.
7. Survey, Search, and Data Analytics Tools
The Income Tax Department increasingly uses AI-driven analytics, data mining, and risk profiling tools to:
- Identify mismatches between reported income and asset sales
- Flag unusual land transaction patterns across multiple states
- Link land sale proceeds to bank deposits or reinvestments not reported in returns
This digital integration improves surveillance and compliance enforcement across jurisdictions.
