Buying NRI property? New rules kick in October 1
Effective October 1, 2026, Indian residents purchasing property from non-resident Indian (NRI) sellers will no longer need to obtain a Tax Deduction and Collection Account Number (TAN) upon executing the transaction. Prior to this change, buyers had to obtain a TAN to deduct tax on the sale proceeds, a process that could take seven to ten days and caused additional compliance concerns.
Now, buyers will only need to provide their Permanent Account Number (PAN) in Form 141-cum-challan. This new rule aligns compliance requirements with those of domestic buyers. The change is brought about by the Finance Act, 2026, which amended Section 397(1)(c) of the Income Tax Act, 2025, to exempt resident individuals or HUFs from obtaining a TAN for deducting tax on immovable property transfers.
Buyers will now report the transaction in the new Schedule E of Form 141, issue a TDS certificate in Form 132, and provide the seller's contact, email, and overseas address. If the NRI seller lacks a PAN, the buyer must provide a Tax Residency Certificate (TRC) and Tax Identification Number (TIN) to avoid higher tax deductions.
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