2 hrs ago
India Notifies New TDS Rules for Non-Resident Property Transfers
India has changed the tax paperwork for buying property from someone who lives outside India.
The changes begin on October 1, 2026.
Buyers will not need a TAN just for this type of purchase.
However, buyers must still deduct tax from the payment to the seller.
The tax rate is based on the non-resident seller’s capital gains, not the usual 1 percent rate for resident sellers.
Buyers must report the transaction using Form 141 and give the seller a TDS certificate.
They must collect details such as the seller’s foreign address and tax identification information.
The new system makes reporting easier in some ways but requires more documents and careful coordination.
New TDS rules for property purchases from non-resident sellers take effect October 1, 2026.
Resident individual and HUF buyers will not need a TAN solely for these transactions.
Buyers must deduct tax at rates for the non-resident seller’s capital gains, plus surcharge and cess.
Buyers must file Form 141 within 30 days after the month in which tax is deducted.
The rules require overseas seller details and improve tracking of instalment payments and cumulative TDS compliance.
- Who
- Resident individuals and Hindu Undivided Families buying immovable property from non-resident sellers, along with the Income Tax Department.
- What
- The Income Tax Department has amended TDS reporting and deduction procedures for immovable property transfers involving non-resident sellers.
- Where
- India, in transactions involving immovable property and non-resident sellers.
- When
- The changes take effect on October 1, 2026.
- Why
- The changes remove the need for a TAN solely for these transactions while strengthening reporting, information matching and tracking of TDS compliance.
Procedural Relief
Greater Compliance Burden
TAN requirement
Procedural Relief
Resident individuals and Hindu Undivided Families no longer need a TAN solely for buying property from a non-resident seller.
Greater Compliance Burden
Although the TAN requirement is removed, buyers must still deduct, deposit and report tax through the prescribed Form 141 process.
Transaction reporting
Procedural Relief
Using a combined challan-cum-statement and linking instalment payments can simplify reporting and improve tracking of cumulative consideration.
Greater Compliance Burden
Buyers must collect and maintain more information, including overseas addresses, tax documents, payment details, registration dates and supporting records.
Tax liability
Procedural Relief
The changes reduce procedural entry barriers for bona fide property buyers.
Greater Compliance Burden
The changes do not reduce the underlying tax obligation: the buyer must deduct tax at rates applicable to the non-resident seller’s capital gains, and the ₹50 lakh threshold does not apply.
Key facts
- Effective date
- October 1, 2026
- Reporting form
- Buyers must use Form 141, a combined challan-cum-statement, and report purchases in its new Schedule E.
- Filing deadline
- Form 141 must be filed within 30 days from the end of the month in which tax is deducted.
- TDS certificate
- The buyer must issue the seller a TDS certificate in Form 132.
- Applicable tax
- Tax is deducted at rates applicable to the non-resident seller’s capital gains, plus surcharge and cess.
- Seller information
- The seller must provide a foreign address, contact number and email ID; a tax residency certificate and foreign tax identification number are required if the seller lacks an Indian PAN.
- Threshold
- The ₹50 lakh threshold applicable to certain resident-seller transactions does not apply when the seller is a non-resident.
Quotes
Amit Maheshwari
Managing Partner at AKM Global
“The requirement to capture details such as the seller’s overseas address, Tax Residency Certificate and foreign Tax Identification Number or unique identification number, even where an Indian PAN is not available, should provide the tax administration with better visibility and facilitate more effective information matching for cross-border property transactions.”
thehindubusinessline.com
“Tax is still required to be deducted at the rates applicable to the non-resident seller’s capital gains, plus surcharge and cess, and not at the 1 per cent that applies to purchases from residents.”
thehindubusinessline.com
Sources
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