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Property Purchases From NRIs Get Simpler TDS Compliance
Buying a property from an NRI will become easier for some buyers.
Starting October 1, 2026, resident individuals and Hindu Undivided Families will not need to obtain a TAN just to deduct this tax.
Instead, they can use their PAN through the income tax portal.
They will complete Form 141 and deposit the TDS online.
A new Schedule E will ask for detailed information about the property, buyers, sellers, payments, and tax.
It will also record whether the payment is made all at once or in instalments.
Buyers must provide extra information about the NRI seller, including overseas contact and tax identification details.
The buyer will give the seller an updated Form 132 as proof of the tax deposited.
TDS is required on the sale consideration even when the amount is below a threshold.
From October 1, 2026, resident individuals and HUFs buying property from NRIs can use a PAN-based TDS process without obtaining a TAN.
Buyers must report detailed information through the new Schedule E in Form 141, including property, parties, payment, and TDS details.
For instalment payments, the reporting system will link later or final instalments with earlier acknowledgements.
Buyers must provide overseas contact, address, Tax Residency Certificate, and foreign Tax Identification Number details for NRI sellers, even without an Indian PAN.
TDS applies to the full sale consideration without a threshold, with rates based on the NRI seller’s applicable tax treatment.
- Who
- Resident individuals and Hindu Undivided Families purchasing property from non-resident Indian sellers.
- What
- The Central Board of Direct Taxes is simplifying TDS compliance by allowing buyers to use a PAN-based process instead of obtaining a TAN.
- Where
- For immovable-property transactions in India involving non-resident Indian sellers.
- When
- The changes take effect on October 1, 2026.
- Why
- To remove the additional TAN requirement while collecting more detailed information about the transaction and instalment payments.
Key facts
- Effective date
- October 1, 2026
- Eligible buyers
- Resident individuals and Hindu Undivided Families
- New compliance method
- PAN-based TDS payment and reporting through the income tax portal
- Relevant form
- Form 141, including the new Schedule E
- Seller information
- Overseas contact details, address, Tax Residency Certificate, and foreign Tax Identification Number or equivalent details
- TDS threshold
- No threshold for non-deduction when buying immovable property from an NRI
- Long-term capital gains rate
- 12.5%, plus applicable surcharge and cess
Quotes
Neeraj Agarwala
Senior partner at Nangia and Company
“This eliminates the additional step of obtaining a TAN solely for the purpose of making TDS payments and makes the compliance process simpler.”
financialexpress.com
“This should make it easier for the tax administration to track cumulative consideration and corresponding TDS compliance.”
financialexpress.com
Sources
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