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The Central Board of Direct Taxes (CBDT) has simplified TDS compliance for resident individuals and Hindu Undivided Families (HUFs) buying immovable property from a non-resident seller.
From 1 October 2026, an eligible buyer will no longer need to obtain a separate Tax Deduction and Collection Account Number (TAN) just for this transaction.
Instead, the buyer can use their PAN and complete the TDS compliance through the amended Form 141. A new Schedule E has been added specifically for purchases of immovable property from non-resident sellers.
What was the TDS requirement earlier?
Suppose you are an Indian resident individual and you want to buy a flat from an NRI.
Because the seller is a non-resident, the buyer has to deduct TDS from the amount paid to the seller.
Until now, an individual buyer generally had to go through TAN-based TDS compliance even though buying a property might be a one-time transaction.
So, an ordinary person buying one house could have to obtain a separate TAN — Tax Deduction and Collection Account Number — just to deduct, deposit and report this TDS.
That added unnecessary paperwork for many individual buyers and HUFs.
What changes from 1 October 2026?
From 1 October 2026, a resident individual or HUF buying immovable property from a non-resident will not need to obtain a TAN just for this transaction.
Instead, the buyer can use their PAN and complete the TDS compliance through Form 141.
The process can be understood simply as:
Earlier:
Buyer → Obtain TAN → Deduct TDS → TAN-based compliance → Deposit and report TDS
From 1 October 2026:
Buyer → Use PAN → Deduct TDS → Form 141, Schedule E → Deposit and report TDS
The government has therefore removed one major registration and compliance step for eligible property buyers.
Important: TDS Has Not Been Removed
This is the most important point in the update.
The government has not said that you do not need to deduct TDS when buying property from an NRI or other non-resident seller.
The change is mainly about how eligible resident buyers report and deposit the TDS.
The buyer must still calculate and deduct the applicable TDS under Section 393(2) of the Income-tax Act, 2025.
So:
No TAN does not mean no TDS.
It simply means PAN replaces TAN for this specific compliance route.
What Is Schedule E of Form 141?
CBDT has introduced a dedicated Schedule E in Form 141 for purchases of immovable property from non-resident sellers.
Schedule E captures details such as:
- Property details
- Details of all buyers and sellers
- Agreement and registration dates
- Total sale consideration
- Stamp duty value
- Instalment details
- Seller’s residential status
- Nature of capital gains
- Applicable TDS rate
- TDS amount
If the non-resident seller does not have PAN, certain overseas details may also be required, including the foreign address, Tax Residency Certificate details and foreign Tax Identification Number.
Where a lower or nil deduction certificate is available, the new form also provides fields for reporting the relevant certificate.
Deadline for Form 141 and TDS Certificate
The buyer has to deposit the TDS and file Form 141 within 30 days from the end of the month in which the tax is deducted.
After filing Form 141, the buyer must furnish the non-resident seller with the TDS certificate in Form 132.
The certificate is required to be furnished within 15 days from the due date of Form 141.
Why is this TDS change important for property buyers?
For an individual buying a property, obtaining and maintaining a TAN for what could be a one-time transaction was an additional compliance burden.
The new system moves eligible resident individual and HUF buyers to a PAN-based mechanism while keeping the TDS reporting requirement in place.
In simple terms, from 1 October 2026, resident individuals and HUFs buying immovable property from non-residents can use PAN and Form 141 instead of obtaining a separate TAN.
The TDS obligation itself continues.
How Can Mercurius Help?
Buying property from a non-resident involves TDS calculation, documentation, and filing requirements.
Mercurius can assist buyers and non-resident sellers in understanding the applicable TDS requirements, reviewing the transaction documents, and completing the required TDS compliance correctly and on time.
We are a professional firm providing tax filing assistance with 18+ years of experience in the market. No matter how complex the situation is, we treat every case individually and provide the maximum possible tax benefits and advantages available under the applicable tax laws.
For more details or assistance with your tax filing requirements, you can contact our team of professionals.
