Buying a property in India from an NRI is set to become simpler from October 1, 2026.
The Central Board of Direct Taxes (CBDT), through Notification No. 121/2026 dated September 22, 2026, has amended the Income-tax Rules, 2026 to simplify TDS compliance for resident individuals and Hindu Undivided Families (HUFs) purchasing immovable property from non-residents.
The biggest change is straightforward:
From October 1, 2026, an eligible resident individual or HUF buying property from a non-resident will no longer need to obtain a separate TAN merely for this TDS compliance.
Instead, the buyer will be able to deposit and report the TDS through Form 141, using the new Schedule E specifically introduced for property purchased from a non-resident.
However, this is important: the TDS obligation itself has not been removed. The buyer must still determine the applicable TDS, deduct it correctly, deposit it within the prescribed timeline and report the transaction.
Quick Summary: What Changes from October 1, 2026?
| Particulars | New Rule |
| Effective date | October 1, 2026 |
| Applicable buyer | Resident Individual or HUF |
| Seller | Non-resident |
| TAN required? | No, for the specified transaction |
| TDS still applicable? | Yes |
| Reporting form | Form 141 |
| New schedule | Schedule E |
| Relevant provision | Section 393(2), Table Sl. No. 17 |
| TDS payment/reporting timeline | Within 30 days from the end of the month in which TDS is deducted |
| TDS certificate | Form 132, subject to prescribed requirements |
What Was the Problem with the Earlier System?
Until this change, a resident individual or HUF purchasing property from a non-resident generally had to deal with a TAN-based TDS compliance mechanism.
For an individual making what may be a one-time property purchase, obtaining and managing a separate Tax Deduction and Collection Account Number (TAN) added another layer of compliance.
The Finance Act, 2026 provided relief from the TAN requirement for the specified category of resident individual/HUF buyers from October 1, 2026.
CBDT has now introduced the supporting reporting framework by amending the Income-tax Rules, 2026 and Forms 132 and 141.
In simple terms:
Earlier: TAN-based compliance
From October 1, 2026: PAN-based Form 141 compliance for eligible resident individual/HUF buyers
This makes the procedure simpler without removing the buyer’s responsibility to deduct tax.
What Is Form 141?
Form 141 is a challan-cum-statement for TDS payment and reporting under the Income-tax Act, 2025.
CBDT has now expanded Form 141 to include transactions covered under Section 393(2), Table Sl. No. 17, where a resident individual or HUF purchases immovable property from a non-resident.
A dedicated Schedule E has been added specifically for these transactions.
This means the buyer can use a transaction-specific PAN-based mechanism rather than obtaining TAN solely for the property purchase.
What Is Schedule E of Form 141?
Schedule E is the new section of Form 141 specifically designed for reporting TDS on consideration paid for the transfer of immovable property by a non-resident to a resident individual or HUF.
It captures detailed information about:
- The property
- Buyer or buyers
- Non-resident seller or sellers
- Sale consideration
- Stamp duty value
- Payment details
- TDS calculation
- Foreign tax and residency information of the seller
Therefore, while the TAN requirement is being removed, the reporting requirements remain detailed.
What Information Will the Buyer Need to Provide?
Before completing the transaction, buyers should keep the required information ready.
1. Property Details
The form may require details such as:
- Type of immovable property
- Complete property address
- Date of agreement
- Registration date, where applicable
- Stamp duty value
- Total sale consideration
2. Buyer Details
Where there are one or more buyers, relevant information includes:
- PAN
- Name
- Share or proportion of consideration payable by each buyer
Where there are multiple deductors, separate filing requirements may apply.
3. NRI or Non-Resident Seller Details
The reporting requirements for the non-resident seller are more extensive.
The buyer may need to obtain:
- Seller’s name
- PAN, where available
- Residential/status details
- Contact number
- Email address
- Overseas residential address
- Tax Residency Certificate (TRC) number, where applicable
- Foreign Tax Identification Number (TIN) or equivalent identification, where applicable
- Seller’s proportionate share in the transaction
This makes it important for buyers to collect the seller’s tax and residency documents before making the payment, rather than trying to obtain them later.
What Happens If the Property Price Is Paid in Instalments?
Schedule E also accommodates transactions where the consideration is not paid in one lump sum.
The buyer may need to indicate whether the payment is:
- First instalment
- Subsequent instalment
- Final instalment
For subsequent payments, details of earlier Form 141 filings, including the relevant acknowledgement information, may also be required.
This is particularly important for under-construction properties or transactions where consideration is paid in stages.
What TDS Details Need to Be Reported?
Schedule E requires transaction-level information relating to the tax deducted.
Depending on the transaction, details can include:
- Seller’s PAN and name
- Relevant capital gains category
- Proportionate stamp duty value
- Amount paid in previous instalments
- Amount being paid in the current transaction
- Date of payment
- Amount on which TDS is applicable
- Applicable TDS rate
- TDS amount
- Date of deduction
- Relevant certificate details, where applicable
The reported tax amount should also appropriately account for surcharge and cess wherever applicable.
Has the TDS Rate on Property Purchased from an NRI Changed?
No. The October 2026 amendment primarily changes the compliance and reporting mechanism; it does not itself introduce a new flat TDS rate for NRI property sales.
This distinction is extremely important.
When property is purchased from a non-resident, buyers should not simply assume that the TDS treatment is the same as a standard property purchase from a resident seller.
The applicable withholding can depend on the relevant tax provisions, the nature of the taxable income, applicable rates, surcharge and cess, and whether an appropriate lower or nil deduction certificate is available.
Therefore, buyers should determine the correct TDS position before releasing the sale consideration.
Lower TDS Certificate Can Still Be Relevant
In some NRI property transactions, the tax required to be withheld on the payment can be materially different from the seller’s ultimate tax liability.
Depending on the facts and applicable provisions, a lower or nil deduction certificate may be relevant.
The new TAN exemption does not eliminate this consideration.
So, an NRI planning to sell property in India should ideally review the tax implications before the transaction reaches the payment or registration stage.
TDS Payment and Form 141 Due Date
Under the amended framework, the TDS payment and Form 141 reporting are generally required within 30 days from the end of the month in which the tax is deducted, subject to the applicable rules.
For example, if TDS is deducted during October 2026, the applicable compliance deadline should be determined based on the prescribed 30-day period from the end of October.
Buyers should not wait until the property registration is completed to understand their TDS responsibilities.
Form 132 Has Also Been Amended
CBDT has also amended Form 132 to recognise the transfer of immovable property by a non-resident to a resident individual or HUF.
Under the amended framework, the prescribed TDS certificate process also continues.
Therefore, Form 141 should not be viewed in isolation. Buyers need to complete the entire TDS compliance cycle correctly.
Before vs After October 1, 2026
| Compliance Area | Earlier Framework | From October 1, 2026 |
| Buyer | Resident individual/HUF | Resident individual/HUF |
| Seller | Non-resident | Non-resident |
| Separate TAN | Generally required | Not required for specified transactions |
| Compliance mechanism | TAN-oriented process | PAN-based challan-cum-statement |
| Main reporting | Existing TDS reporting framework | Form 141 – Schedule E |
| TDS obligation | Applicable | Continues |
| Seller/property information | Required | Detailed reporting continues |
The real benefit is therefore simpler administration, not exemption from TDS.
Practical Checklist for Buyers Purchasing Property from an NRI
Before making payment to an NRI seller, a resident individual or HUF should broadly review the following:
- Confirm the seller’s residential status for Indian income-tax purposes. Do not rely only on citizenship or an overseas address.
- Collect the seller’s PAN and overseas tax information, including TRC/TIN details where applicable.
- Determine the correct TDS treatment before payment. Do not assume the rate applicable to a resident property seller automatically applies to an NRI seller.
- Check whether a lower or nil deduction certificate applies to the transaction.
- Maintain complete property documentation, including agreement value, stamp duty value, payment schedule and registration information.
- Deduct TDS at the appropriate time and ensure surcharge and cess are considered wherever applicable.
- File Form 141 – Schedule E within the prescribed timeline for transactions covered by the new framework.
- Complete the TDS certificate requirements and maintain proof of payment and filing.
What Should NRI Property Sellers Do?
The new rule primarily reduces compliance for the resident buyer, but NRI sellers also need to prepare.
If you are an NRI or other non-resident planning to sell property in India, keep the following information readily available:
- PAN
- Overseas residential address
- Email and contact details
- Tax Residency Certificate, where relevant
- Foreign Tax Identification Number
- Original purchase documents
- Property improvement and other relevant cost records
- Sale agreement details
- Relevant tax certificates, if obtained
Early tax planning can help avoid delays in the sale process and reduce the risk of incorrect TDS being deducted.
Why Is This Change Important?
The amendment addresses a practical compliance issue.
A resident individual or HUF buying property from a non-resident may be entering into a one-time transaction. Requiring a separate TAN and associated compliance for that single purchase created additional procedural work.
From October 1, 2026, the PAN-based Form 141 mechanism makes the process more streamlined.
At the same time, the detailed information required in Schedule E allows the Income Tax Department to continue tracking the property, buyer, seller, transaction value, tax residency and TDS information.
So, the change can be summarised as:
Less procedural friction for the buyer, but continued responsibility for correct TDS compliance.
Key Takeaway
From October 1, 2026, buying property from an NRI becomes procedurally easier for resident individuals and HUFs because a separate TAN will no longer be required for the specified TDS compliance.
Instead, the buyer can use the PAN-based Form 141 with the newly introduced Schedule E.
But simpler compliance does not mean no compliance.
The buyer remains responsible for determining the appropriate TDS, deducting and depositing it correctly, reporting the required property and seller information, and completing the prescribed documentation.
For high-value NRI property transactions, it is advisable for both the buyer and seller to review the tax implications before the payment and registration process begins, rather than correcting TDS issues after the transaction.
Need Help With NRI Property Taxation?
Buying property from an NRI or planning to sell your Indian property as an NRI?
Enrichwise can help you review the transaction from a taxation and compliance perspective, including NRI taxation, property-related TDS and transaction documentation.
Connect with Enrichwise before completing the transaction to understand the compliance applicable to your specific case.
Enrichwise is a three-generation financial services firm with over two decades of experience across taxation, NRI taxation, investments, insurance, legal services, succession planning and wills, GIFT City and global investing.
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