Property purchase from NRIs gets simpler from Oct 1

From 1 October 2026, resident individuals and Hindu Undivided Families (HUFs) buying immovable property from non-resident Indians (NRIs) will no longer need a separate Tax Deduction and Collection Account Number (TAN) for tax deducted at source (TDS). The Income Tax Department has replaced the requirement with a PAN-based challan-cum-statement mechanism using Form 141. Livemint reports the change, part of the transition to the new income-tax law, aims to simplify compliance for occasional buyers.

The relief is procedural, not substantive. The Hindu Businessline quotes experts clarifying that the buyer must still deduct TDS at the non-resident seller's capital gains rate, plus surcharge and cess, not the 1 per cent rate for resident sales. The Rs 50 lakh threshold for lower TDS does not apply. Sellers must provide a foreign address, contact number and email ID. If the seller lacks a PAN, a tax residency certificate and foreign tax identification number are mandatory, or TDS is deducted at a higher rate.

Buyers must report each instalment of consideration separately through the new Schedule E to Form 141 within 30 days of the month-end when tax is deducted. Where there are multiple buyers, each must file a separate Form 141. The buyer must also issue a TDS certificate in Form 132 to the seller. Experts quoted by The Hindu Businessline advise aligning payment schedules, documentation and TDS processes from the outset for cross-border transactions.