{"id":1091729,"date":"2026-10-08T15:37:57","date_gmt":"2026-10-08T10:07:57","guid":{"rendered":"https:\/\/www.squareyards.com\/blog\/?p=1091729"},"modified":"2026-10-08T15:37:57","modified_gmt":"2026-10-08T10:07:57","slug":"tax-department-eases-nri-property-purchase-rules-removes-tan-requirement","status":"publish","type":"post","link":"https:\/\/www.squareyards.com\/blog\/tax-department-eases-nri-property-purchase-rules-removes-tan-requirement","title":{"rendered":"Tax Department eases NRI property purchase rules, removes TAN requirement"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Buying property from an NRI has become simpler for resident individual buyers and HUFs. From October 1, 2026, they no longer need to obtain a separate Tax Deduction and Collection Account Number (TAN) to deduct TDS when purchasing immovable property from a non-resident.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Instead, buyers can use their PAN to deduct and report the tax through the newly expanded Form 141, which now includes Schedule E specifically for property transactions involving non-resident sellers. The change is aimed at reducing the compliance burden for what can often be a one-time property transaction.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The important part, however, is that TDS itself has not been removed. The buyer still has to deduct tax at the applicable rate under the non-resident provisions.<\/span><\/p>\n<h2><b>What changed from October 1, 2026?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Earlier, a resident individual or HUF buying property from a non-resident had to obtain a TAN before complying with the TDS requirement. The buyer also had to follow the separate reporting and certificate requirements applicable to such transactions. The new framework removes that extra step.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">From October 1, eligible buyers can:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Use their PAN instead of TAN for the transaction.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Deduct and deposit TDS through Form 141.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Report the transaction under the newly introduced Schedule E.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Provide the prescribed Form 132 TDS certificate to the seller.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The relief specifically applies to resident individuals and HUFs. It should not be read as a blanket removal of TAN requirements for every type of buyer.<\/span><\/p>\n<h2><b>What does Schedule E require?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The new Schedule E brings NRI property purchases into the PAN-based Form 141 framework, but it still requires detailed information about the transaction.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Buyers need to provide details such as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Property address and type<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Date of agreement and registration, where applicable<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Total sale consideration and stamp duty value<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Details of all buyers and their respective shares<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">NRI seller&#8217;s PAN, where available<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Overseas address and contact details<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Foreign Tax Identification Number and Tax Residency Certificate details, where applicable<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Payment and instalment details<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">TDS deducted and the applicable rate<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Details of any lower or nil deduction certificate.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Buyers should collect the seller&#8217;s tax and overseas details before making the first payment, rather than waiting until the registration stage.<\/span><\/p>\n<h2><b>NRI seller vs resident seller: What changes?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The new filing mechanism may look similar to the process used for resident-seller transactions, but the underlying TDS rules are different.<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td>\n<p><b>Parameter<\/b><\/p>\n<\/td>\n<td>\n<p><b>Resident seller<\/b><\/p>\n<\/td>\n<td>\n<p><b>NRI\/non-resident seller<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span style=\"font-weight: 400;\">TAN for resident individual\/HUF<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Not required<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Not required from Oct 1, 2026<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span style=\"font-weight: 400;\">Form<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Form 141 &#8211; Schedule B<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Form 141 &#8211; Schedule E<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span style=\"font-weight: 400;\">Rs 50 lakh threshold<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Applies under the resident-property provision<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Does not apply<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span style=\"font-weight: 400;\">TDS rate<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">1% under the applicable provision<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Applicable non-resident rate<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span style=\"font-weight: 400;\">TDS certificate<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Form 132<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Form 132<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span style=\"font-weight: 400;\">Form 141 deadline<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Within 30 days from the end of deduction month<\/span><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Within 30 days from the end of deduction month<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400;\">When buying qualifying property from a resident seller, the 1% TDS provision applies once the prescribed Rs 50 lakh threshold is crossed. That provision does not apply when the seller is a non-resident.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For an NRI\/non-resident seller, TDS continues to be governed by the applicable non-resident provisions, and there is no equivalent Rs 50 lakh threshold.<\/span><\/p>\n<h2><b>How to complete the new TDS process?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The process under the new framework is relatively straightforward:<\/span><\/p>\n<p><b>Confirm the seller&#8217;s status and applicable rate: <\/b><span style=\"font-weight: 400;\">Establish that the seller is a non-resident for income-tax purposes and determine the applicable TDS rate before making the payment.<\/span><\/p>\n<p><b>Collect the seller&#8217;s details: <\/b><span style=\"font-weight: 400;\">Obtain the seller&#8217;s PAN, overseas address and contact details, and the required foreign tax identification or residency information where applicable.<\/span><\/p>\n<p><b>Deduct TDS when payment is made: <\/b><span style=\"font-weight: 400;\">TDS generally has to be deducted at the time of payment or credit to the seller, whichever is earlier. This also matters when the property is being purchased through instalments.<\/span><\/p>\n<p><b>File Form 141 using Schedule E: <\/b><span style=\"font-weight: 400;\">The eligible resident individual or HUF can report the transaction through Form 141, Schedule E, using their PAN. The challan-cum-statement must be furnished within 30 days from the end of the month in which the TDS was deducted.<\/span><\/p>\n<p><b>Provide Form 132 to the seller: <\/b><span style=\"font-weight: 400;\">The amended Form 132 serves as the prescribed TDS certificate for the transaction. It is to be furnished within the prescribed timeline after the Form 141 filing.<\/span><\/p>\n<h2><b>What buyers should not get wrong<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The underlying non-resident TDS provisions still apply, so buyers need to get the rate, threshold and reporting requirements right.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Three things are particularly important:<\/span><\/p>\n<p><b>Don&#8217;t apply 1% TDS.<\/b><span style=\"font-weight: 400;\"> The resident-seller property rule does not apply to an NRI seller.<\/span><\/p>\n<p><b>Don&#8217;t wait for the Rs 50 lakh threshold.<\/b><span style=\"font-weight: 400;\"> The resident-property threshold does not apply to the non-resident transaction.<\/span><\/p>\n<p><b>Don&#8217;t treat Form 141 as a simple one-line filing.<\/b><span style=\"font-weight: 400;\"> Schedule E requires detailed information about the property, buyers, seller, payments and TDS. If there are multiple buyers, the form also captures their respective shares, and each deductor is required to file separately where applicable.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The October 1 change makes the TDS process simpler by removing the TAN requirement for eligible resident individual and HUF buyers. But it does not remove the TDS obligation or make an NRI property transaction subject to the same rules as a resident-seller transaction.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Buying property from an NRI has become simpler for resident individual buyers and HUFs. From October 1, 2026, they no longer need to obtain a separate Tax Deduction and Collection Account Number (TAN) to deduct TDS when purchasing immovable property from a non-resident. Instead, buyers can use their PAN to deduct and report the tax [&hellip;]<\/p>\n","protected":false},"author":148,"featured_media":1091730,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"acf":[],"_links":{"self":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/1091729"}],"collection":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/users\/148"}],"replies":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/comments?post=1091729"}],"version-history":[{"count":2,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/1091729\/revisions"}],"predecessor-version":[{"id":1091733,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/1091729\/revisions\/1091733"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media\/1091730"}],"wp:attachment":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media?parent=1091729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/categories?post=1091729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}