Buying Property From an NRI? TDS Rules Change From 1 October 2026

Overview:  The Central Board of Direct Taxes (CBDT) has notified the Income-tax (Fifth Amendment) Rules, 2026, bringing a simpler TDS compliance process for resident individuals and Hindu Undivided Families, buying immovable property from non-resident sellers. From 1 October 2026, eligible buyers will not need a separate TAN for the transaction and will be able to use a PAN-based challan-cum-statement. Form 141 has also been expanded, with a new Schedule E for reporting property and seller details.

Buying property from a Non Resident Indian can involve an extra layer of tax compliance for the buyer. Until now, a resident individual or HUF deducting TDS on a property purchase from a non-resident seller had to obtain a Tax Deduction and Collection Account Number (TAN), even where the requirement arose for a single transaction.

That will change from 1 October 2026. The new rules shift the payment and reporting process to the buyer’s PAN, while the TDS obligation itself continues.

What Changes for Property Buyers?

The change follows the Budget 2026 amendment to the TAN provisions and is now backed by the CBDT’s detailed rules.

For eligible resident individuals and HUFs:

• No separate TAN: A separate TAN will no longer be required for the specified Section 393(2) property transaction.
• PAN-based TDS: The buyer can deduct and report TDS through a PAN-based challan-cum-statement.
• Form 141: The form has been expanded to cover these transactions.
• New Schedule E: Buyers will have to provide detailed information about the property, buyer and non-resident seller.
• Form 132: The form has also been amended to reflect the new reporting arrangement.

The underlying TDS responsibility does not disappear. The buyer must still determine the applicable tax treatment, deduct the required amount and report it correctly.

What Information Will Buyers Need?

The new Schedule E makes the transaction more detailed from a reporting perspective. Information can include the property’s address and type, agreement and registration details, sale consideration and stamp-duty value, buyer and seller PAN details, the non-resident seller’s overseas address and tax-residency information.

This means buyers should collect the relevant seller and property documents before completing the TDS reporting, particularly where the consideration is paid in installments.

What Does This Mean for Businesses and Individuals?

For an individual buying property from a non-resident, removing the separate TAN requirement can reduce an additional compliance step. It also brings the reporting process closer to the PAN-based mechanism already used for specified property TDS involving resident sellers.

However, the change is about how TDS is paid and reported, not whether TDS applies. Buyers still need to get the deduction, documentation and reporting right.

Setindiabiz Support

A property purchase involving a non-resident seller can bring together TDS compliance, tax documentation and income-tax filing. A mistake in the seller’s residential status, TDS calculation or supporting documents can create avoidable follow-up work.

Setindiabiz can help buyers with the end-to-end compliance process — from reviewing the applicable TDS requirement and transaction documents to preparing the required reporting and coordinating related income-tax compliance.

For a high-value property transaction, getting the TDS process right before payment and registration can help avoid compliance issues later.

FAQs

Following 1st October, 2026, resident individuals and HUFs buying immovable property from non-resident sellers will have a PAN-based TDS payment and reporting route instead of obtaining a separate TAN. The new Form 141 and Schedule E simplify the process, but accurate TDS calculation and documentation remain essential.