Buying property from NRIs is about to become easier
What's the story
From October 1, 2026, resident individuals and Hindu Undivided Families (HUFs) will have a smoother process when buying property from non-resident sellers. The change comes as they won't need to get a separate Tax Deduction and Collection Account Number (TAN) just to meet the TDS requirement. However, it's important to note that the TDS obligation itself remains unchanged.
Compliance simplification
New compliance mechanism introduced
The Finance Ministry has introduced a new compliance mechanism using PAN, through an amended Form 141.
This will let eligible resident individuals and HUFs meet their TDS obligation without getting a separate TAN for the property transaction.
The revised form has a dedicated Schedule E to report TDS on buying immovable property from a non-resident seller.
Reporting details
Schedule E requires extensive transaction details
Schedule E requires buyers to furnish extensive information about the transaction, such as property address and type, details of all buyers and sellers involved.
It also seeks other transaction-related information like agreement date, registration date, stamp duty value, total sale consideration, and payment mode (lump sum or installments).
For each NRI seller, details like amount paid/credited, payment date, TDS liability amount and rate are required.
Alternate provisions
For sellers without a PAN
If the non-resident seller doesn't have a PAN, the new mechanism provides for specified foreign contact details, overseas address, tax residency certificate details, and foreign tax identification number.
This ensures that even without a PAN, all necessary information is provided for smooth property transactions between resident buyers and non-resident sellers.
TDS process
Buyers must follow 2 key steps for TDS deduction
The revised mechanism has two key steps that buyers must follow during the property transaction.
First, they have to report the transaction through Form 141 and deposit the deducted TDS from payment to the non-resident seller, with the government within a stipulated time.
Second, after filing Form 141, buyer has to issue Form 132 (TDS certificate) to the non-resident seller for the transaction.