Buying property from an NRI: from 1 October 2026, resident buyers can deposit TDS with PAN via Form 141

A resident individual or Hindu Undivided Family (HUF) buying a flat, house or plot from a non-resident Indian can now pay the tax deducted at source using only their PAN. The change took effect on 1 October 2026 and removes the need to apply for a separate Tax Deduction and Collection Account Number (TAN) for what is, for most families, a one-time purchase.

What changed

The Central Board of Direct Taxes (CBDT) notified the Income-tax (Fifth Amendment) Rules, 2026 on 22 September 2026 as Notification No. 121/2026 (G.S.R. 830(E)). The rules came into force on 1 October 2026.

They follow the Budget 2026-27 proposal titled “Relaxation from requirement to obtain TAN”. According to the Finance Ministry’s memorandum on the Finance Bill, section 397(1)(c) of the Income-tax Act, 2025 was amended so that a resident individual or HUF deducting tax on the price paid to a non-resident seller of immovable property does not have to obtain a TAN. The memorandum said that requirement was an unnecessary burden for a single transaction, and fixed 1 October 2026 as the start date.

The amendment rules put this into practice:

• Rules 215, 218 and 219 of the Income-tax Rules, 2026 now cover TDS under section 393(2) (Table serial number 17) where the payer is a resident individual or HUF.
• Form 141, the PAN-based challan-cum-statement already used when buying property from a resident seller, gets a new Schedule E for purchases from non-residents.
• Form 132, the TDS certificate, is updated to include this type of transaction.

Schedule E asks for the property address and type, details of every buyer and seller with their shares, the agreement and registration dates, stamp duty value, total consideration, and whether payment is a lump sum or in instalments. For the non-resident seller it also asks for an overseas address, tax residency certificate number and foreign tax identification number, along with any lower-deduction certificate the seller holds.

Who it affects

• Resident individual and HUF buyers purchasing property from a non-resident. They gain the PAN route.
• NRI sellers. Their buyer can now pay TDS without the delay of a TAN application, which may make a sale simpler to close. The tax withheld from them is not reduced.
• Companies, firms and other buyers are outside the relief and must continue to use a TAN, as Taxscan’s reading of the rules points out.

Business Today and Taxscan both note that there is still no ₹50 lakh threshold when the seller is a non-resident. That threshold applies only to purchases from resident sellers.

What it means for you

If you are buying from an NRI:

1. Check the date of deduction. The PAN route applies to TDS deducted on or after 1 October 2026. Earlier deductions follow the old TAN-based process.
2. Collect the seller’s details before payment day: PAN if available, overseas address, tax residency certificate and foreign tax ID. Ask whether the seller holds a lower-deduction certificate, because it changes the amount you withhold.
3. File Form 141 with Schedule E on the e-filing portal. The Income Tax Department’s Form 141 FAQs give the due date as within 30 days from the end of the month in which tax is deducted.
4. Download the Form 132 certificate from TRACES once the statement is processed and give it to the seller.

If you are the NRI seller, share your documents with the buyer early. Then check that the TDS shows up against your PAN before you file your return.

Key dates

• 22 September 2026: Income-tax (Fifth Amendment) Rules, 2026 notified.
• 1 October 2026: PAN-based TDS via Form 141 Schedule E available to resident individual and HUF buyers.
• Ongoing: Form 141 due within 30 days from the end of the month of deduction.