From 1 October 2026, You No Longer Need a TAN
From 1 October 2026, a resident individual or HUF who buys immovable property in India from a non-resident no longer needs a TAN to deduct and deposit TDS. The tax is paid and reported through a single challan-cum-statement, Form No. 141, using a new Schedule E. The buyer then issues the seller a TDS certificate in Form No. 132. The change comes from the Income-tax (Fifth Amendment) Rules, 2026 (Notification No. 121/2026, G.S.R. 830(E), dated 22 September 2026). It gives effect to the Finance Act, 2026 amendment to section 397(1)(c) of the Income-tax Act, 2025. For NRI sellers, the change moves work onto your side of the table. The buyer's form now asks for your overseas contact details in every case. If you have no PAN, it asks for your Tax Residency Certificate and foreign Tax Identification Number, or TDS may be deducted at a higher rate.
What changed?
The gap between the two kinds of property purchase has closed.
Buying from a resident seller has long had a simple, TAN-free route. Buying from a non-resident did not.
A one-time buyer, often a family purchasing a flat from a relative abroad, had to register for a TAN and work through the regular TDS return cycle for a single transaction.
|
Point |
Until 30 September 2026 |
From 1 October 2026 |
|---|---|---|
|
TAN for a resident individual/HUF buyer |
Required |
Not required |
|
How TDS is paid and reported |
Through the regular TDS return cycle under a TAN |
One challan-cum-statement: Form No. 141, Schedule E |
|
Certificate to the seller |
Issued under the TAN-based process |
Form No. 132 |
|
Seller’s overseas contact details |
Not a specific field for this transaction |
Mandatory, with or without PAN |
|
Seller without PAN |
Higher-rate risk |
TRC number and foreign TIN can be given to avoid the higher rate |
The amended rules are 215 (certificate), 218 (payment through Form 141) and 219 (statement of deduction). Form No. 132 and Form No. 141 now list “transfer of any immovable property by a non-resident to a resident individual or Hindu undivided family” as a nature of transaction.
Starting Smart 2026
Who it covers, and who it does not
The relief is narrow by design. All three conditions must hold to get this beneift:
- The buyer is a resident individual or a resident HUF. Companies, firms, LLPs and other entities are outside it.
- The seller is a non-resident. The deduction falls under section 393(2) [Table: Sl. No. 17] of the Income-tax Act, 2025.
- The payment is consideration for the transfer of immovable property. Schedule E covers land (other than agricultural land), a building or part of a building, or both.
Purchases from resident sellers continue under their existing route, Schedule B of the same Form No. 141. If there are several buyers, each files a separate form. If the sellers are of different status, corporate and non-corporate sellers go on separate forms.
What Schedule E of Form 141 asks for
Schedule E is detailed. Most of what it asks for comes from the seller, which is why preparation matters more than the filing itself.
Area | Details required |
|---|---|
Property | Full address; type (land, building, or both) |
Buyers | PAN, name and share of consideration for each buyer |
Sellers | PAN if available, name, status code, contact number, email, overseas address, TRC number, foreign TIN, share of consideration |
Transaction dates | Date of agreement; date of registration, if available |
Values | Total stamp duty value; total sale consideration |
Payment pattern | Lump sum or instalments; for later instalments, the previous acknowledgement number; for the last, total paid to date |
Seller’s tax position | Whether the seller has opted out of the tax regime under section 202(1), where applicable; long-term or short-term capital gains |
TDS computation | Proportionate stamp duty value, amounts paid, amount liable to TDS, rate, tax deducted (including surcharge and cess), date of deduction |
Certificates | Section 395(1) certificate obtained by the seller, or section 395(2) certificate obtained by the buyer, if any |
Linked filing | Acknowledgement number of the corresponding Form No. 145, if applicable |
The seller’s status is chosen from ten codes, from “company, other than domestic company” to “individual”, “HUF” and “others”. Some fields will be pre-filled where the system can do so.
If you are the NRI seller: what to hand the buyer
Selling a family home in India from another time zone is already a lot to carry. The new form makes one thing clear: the buyer cannot complete it without you. Send these before the sale deed is signed, not after the money moves.
- ☐ Your PAN, if you have one
- ☐ Your full name, exactly as on your passport and PAN, with no abbreviations
- ☐ Your contact number with country code, and an email you check
- ☐ Your full overseas residential address
- ☐ Your Tax Residency Certificate number from your country of residence (essential if you have no PAN)
- ☐ Your foreign Tax Identification Number, or the unique number your country identifies you by (essential if you have no PAN)
- ☐ Your holding period and cost details, so the buyer can report long-term or short-term gains correctly
- ☐ Any lower or nil deduction certificate you have obtained under section 395(1)
The last item deserves attention. In practice, buyers often deduct on the full sale consideration rather than your actual gain, because they cannot verify your cost. If your real gain is lower, a lower deduction certificate obtained before the sale can keep excess tax from being locked up until you file your return and claim a refund.
If you are the buyer: the steps, in order
- Confirm the seller’s residential status in writing before you sign. It decides which schedule applies and how much tax you deduct.
- Collect the seller’s details from the checklist above. Do not release payment until the TRC and foreign TIN are in hand where the seller has no PAN.
- Work out the tax to deduct, including surcharge and cess, at the rate under the Act or the rate in any certificate issued under section 395.
- Deduct at the time of payment or credit. For instalments, deduct on each one and keep every acknowledgement number; each later filing asks for the previous one.
- File Form No. 141 with Schedule E and deposit the tax. No TAN is needed; your PAN identifies you as the deductor.
- Issue Form No. 132 to the seller as the TDS certificate.
- Keep a file: agreement, sale deed, stamp duty valuation, seller documents, challan, Form 141 acknowledgement and Form 132.
What the notification does not settle
- The remittance side. Moving sale proceeds out of India has its own FEMA and reporting steps. The TDS filing does not complete them.
Most compliance problems in cross-border property sales are not about intent. They come from timing: money moves before the paperwork is ready. The new form rewards the seller and buyer who prepare first.
Frequently asked questions
Do I need a TAN to buy property from an NRI after 1 October 2026?
No, if you are a resident individual or HUF. The Finance Act, 2026 amended section 397(1)(c) of the Income-tax Act, 2025 to remove the TAN requirement for this deduction.
Which form is used to pay TDS on property bought from a non-resident?
Form No. 141, a challan-cum-statement, using the new Schedule E. Schedule B of the same form covers purchases from resident sellers.
Which TDS certificate does the buyer give the NRI seller?
Form No. 132.
When does the change apply?
From 1 October 2026, under the Income-tax (Fifth Amendment) Rules, 2026, notified on 22 September 2026.
Does a company buying from an NRI also get this relief?
No. It applies only where the buyer is a resident individual or HUF.
What if the NRI seller does not have a PAN?
The buyer must furnish the seller’s Tax Residency Certificate number and foreign Tax Identification Number. Without them, TDS may be deducted at a higher rate. The seller’s contact number, email and overseas address are mandatory either way.
Does the new process reduce the tax an NRI seller pays?
No. It simplifies how the buyer deducts and reports tax. The seller’s liability depends on the capital gain, and a lower deduction certificate under section 395(1) is the route to align TDS with actual gain.
What if the property is paid for in instalments?
TDS is deducted on each instalment. Each later filing quotes the previous acknowledgement number, and the last one states the total consideration paid.
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