What reporting is required for large land sales?

Large land sales — particularly those involving high-value transactions, capital gains, and ownership transfers — require a series of regulatory and tax-related reporting obligations to ensure transparency, legality, and fiscal compliance. These obligations apply to both buyers and sellers, depending on the value, location, and nature of the land.

1. Income Tax Return Filing by the Seller

• The seller must report the capital gains from the sale under the “Capital Gains” section in their Income Tax Return (ITR) for the relevant financial year.
  
• If the land was held for more than 24 months, it qualifies as a long-term capital asset, and the seller must compute long-term capital gains (LTCG) with indexation benefit.
  
• All applicable deductions and exemptions (e.g., under Sections 54F, 54EC) must be declared.
  

2. Filing of Form 26QB by the Buyer (TDS Reporting)

• Under Section 194-IA of the Income Tax Act, if the sale consideration exceeds ₹50 lakh, the buyer must:
  
  • Deduct 1% TDS on the sale amount
    
  • File Form 26QB online within 30 days of deduction
    
  • Issue Form 16B to the seller as proof of TDS deduction
    

3. Disclosure in Annual Information Statement (AIS) and Form 26AS

• High-value land sales are automatically reported by the Sub-Registrar’s Office to the Income Tax Department.
  
• The transaction details appear in:
  
  • Annual Information Statement (AIS)
    
  • Form 26AS of both the buyer and seller
    
• These tools are cross-verified during assessment or return filing.
  

4. Stamp Duty and Registration Reporting

• The land sale must be registered with the Sub-Registrar of Assurances as per the Registration Act, 1908.
  
• This includes:
  
  • Payment of stamp duty and registration charges
    
  • Declaration of actual sale value or circle rate, whichever is higher
    
• Registration documents serve as a government record and may be digitally reported to tax departments.
  

5. Capital Gains Account Scheme (CGAS) Declaration

• If the seller intends to claim capital gains exemptions but hasn’t yet reinvested the proceeds, they must:
  
  • Deposit the capital gain in a Capital Gains Account Scheme (CGAS) before the due date of filing ITR
    
  • Report the deposit details in the income tax return
    

6. PAN and Aadhaar Linking for High-Value Transactions

• Both buyer and seller must quote and validate Permanent Account Numbers (PAN) in the sale deed and TDS filings.
  
• Aadhaar-PAN linkage is mandatory for ITR filing and for ensuring proper identity verification.
  

7. Reporting in Audit and Financial Statements (for Businesses or Institutions)

• If the land is sold by a company, trust, or institution:
  
  • The transaction must be recorded in their books of accounts
    
  • Disclosed in their audited financial statements
    
  • Reflected in Tax Audit Report (Form 3CD) if audit is applicable
    

8. Disclosure to Authorities in Case of Foreign Buyer or Seller

• If either party is a non-resident, reporting under:
  
  • FEMA (Foreign Exchange Management Act)
    
  • RBI guidelines (especially for NRI transactions)
    
• May involve additional filings like Form 15CA and 15CB for repatriation of sale proceeds
  

9. Benami Property Reporting

• To ensure compliance with the Prohibition of Benami Property Transactions Act, the buyer and seller must ensure that the transaction:
  
  • Is not done in the name of a proxy or unrelated person
    
  • Has complete ownership and payment disclosure
    

10. Municipal Mutation and Taxpayer Database Update

• After the sale, the buyer must report the transaction to the local municipal body or panchayat for:
  
  • Mutation of property records
    
  • Updating the property tax register
    
• This establishes the buyer as the new legal property holder for future assessments and bills.