TDS Norms Eased for Buying NRI Property: No TAN Needed from October 1

NEW DELHI — In a major compliance relief for property buyers, the Central Board of Direct Taxes (CBDT) has eased tax deducted at source (TDS) regulations for resident individuals and Hindu Undivided Families (HUFs) purchasing immovable property from non-residents (NRIs). Effective October 1, 2026, buyers will no longer be required to obtain a separate Tax Deduction and Collection Account Number (TAN) solely for executing such property transactions.

The policy update, notified under the Income-tax (Fifth Amendment) Rules, 2026, aligns real estate transactions involving non-resident sellers with the streamlined, PAN-based mechanism already utilized for property purchases from resident sellers.

Key Procedural Changes and Form 141 Schedule E

Under the revised framework, buyers can deposit and report TDS under Section 393(2) of the Income-tax Act using a PAN-based challan-cum-statement designated as Form 141. A newly introduced Schedule E within Form 141 has been specifically created to capture comprehensive details of property purchases from non-resident sellers. Additionally, Form 132 has been amended to update the issuance of TDS certificates for non-resident seller transactions.

Tax experts note that while the paperwork has been significantly simplified, the substantive tax liability and deduction rates remain unchanged. TDS rates continue to apply based on the character of the NRI’s capital gains—such as 12.5% plus applicable surcharge and cess for long-term capital gains, or slab rates for short-term gains—unless a lower or nil deduction certificate under Section 395 is obtained.

The transition to the PAN-based Form 141 structure aims to eliminate the administrative friction of registering as a deductor for a one-off transaction, offering greater transparency and ease of compliance for individual taxpayers across the country.

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