UP makes PAN mandatory for property deals to curb benami, foreign-funded buys

Lucknow,UPDATED: Feb 7, 2026 11:01 IST

The Uttar Pradesh government has made PAN cards mandatory for buying and selling property across the state, a move aimed at choking benami transactions and tracking suspected foreign-funded real estate deals, especially in sensitive border districts along Nepal.

The decision followed intelligence and enforcement agencies flagging a pattern of properties being purchased using overseas money in areas close to the Indo-Nepal border. Officials believe such investments are being used to park funds, mask ownership and, in some cases, support terror-linked activities. To tighten the net, the state has directed all district administrations to ensure that both buyers and sellers submit PAN details for every property transaction.

Earlier, the rule was largely enforced in high-risk zones near the border. Now, it has been expanded to the entire state. This included the seven districts adjoining Nepal -- Gorakhpur, Maharajganj, Siddharthnagar, Balrampur, Shravasti, Bahraich and Lakhimpur Kheri -- and all other districts of Uttar Pradesh.

The online registration system has also been modified to make PAN details mandatory before any deed can be processed.

The policy push came after investigations into foreign funding networks operating through property purchases. Last year, the UP Anti-Terrorism Squad (ATS) probed Maulana Shamsul Huda Khan, a resident of Sant Kabir Nagar who had been living in London for years and had obtained British citizenship. Despite staying abroad, he continued to draw salary from a madrasa in Azamgarh between 2007 and 2017.

According to ATS findings, Khan travelled multiple times to Pakistan and attended meetings of suspected organisations. Agencies flagged possible links with terror groups during his visits to Pakistan and Canada. FIRs were registered in Azamgarh and in Shravasti, where he had opened another madrasa near the Indo-Nepal border.

As the case involved foreign funding, the Enforcement Directorate stepped in. The ED found that nearly Rs 4 crore had been routed into multiple accounts linked to Khan.

The money was allegedly used by his family to set up a madrasa in Khalilabad, Sant Kabir Nagar, and to buy property in the names of his wife, son and daughter-in-law. The agency froze around Rs 94.27 lakh across 18 accounts and attached related assets.

Officials said that such cases exposed how property deals can be used to launder overseas funds and quietly build influence in border districts. By mandating PAN cards in every property contract, the government wanted to create a clear financial trail for officials.

With PAN-linked transactions, the Income Tax Department can track unusual buying patterns, verify income sources and flag cases where large-scale purchases do not match declared earnings.

It will also allow agencies like ATS and ED to more easily detect foreign funding links, benami ownership and clustered purchases in specific districts.

The UP government expects the rule to act as a deterrent against illegal activity, curb benami property deals and strengthen surveillance over real estate transactions, particularly in areas vulnerable to cross-border financing and security risks.

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