Do I need a TAN to buy property from an NRI now?

No, not from 1 October 2026. The Income-tax (Fifth Amendment) Rules, 2026 insert a new Schedule E into Form No. 141 so a resident individual or Hindu undivided family deducting tax under section 393(2) [Table: Sl. No. 17] on a purchase of immovable property from a non-resident can pay the tax and file the statement using PAN alone, the same mechanism already used for a purchase from a resident under section 393(1) [Table: Sl. No. 3(i)]. Tax credited or paid before that date still went through TAN and the quarterly statement, now Form No. 144.

What is Schedule E in Form No. 141?

It is the new part of Form No. 141, inserted with effect from 1 October 2026, that captures a purchase of immovable property from a non-resident: the property, the buyers' and sellers' particulars, the agreement and registration dates, the stamp duty value and sale consideration, and, for each seller, whether the gain is long-term or short-term, the rate applied, any certificate under section 395(1) or (2), and the tax deducted. It replaces the general TAN-based quarterly statement for this one category of payment.

Is there a ₹50 lakh threshold for TDS when buying property from an NRI?

No. The ₹50 lakh threshold in section 393(1) [Table: Sl. No. 3(i)] of the Income-tax Act, 2025 applies only where the seller is a resident. Serial number 17 of the Table to section 393(2), which covers 'any other sum chargeable under the provisions of this Act' payable to a non-resident, carries no threshold, so tax must be deducted on the first rupee of consideration whenever the seller is a non-resident, exactly as under section 195(1) of the Income-tax Act, 1961 before it. Only the compliance route for the resident buyer changes from 1 October 2026, not the deduction obligation itself.

How much TDS should a resident buyer deduct when purchasing property from an NRI seller?

At the rates in force under Table Sl. No. 17 to section 393(2), applied to the entire consideration unless a certificate has been obtained. The seller may apply under section 395(1) for deduction at a lower rate or nil, and the buyer may separately apply under section 395(2) for a determination of the proportion of the sum actually chargeable to tax, since the buyer ordinarily cannot know the seller's cost of acquisition. Absent either certificate, deduction on the gross consideration is the default and usually exceeds the seller's real tax liability.

Does this change apply to a sale agreement signed before 1 October 2026?

It depends on when the consideration is credited or paid, not when the agreement was signed, because deduction under Table Sl. No. 17 to section 393(2) is tied to the earlier of the two. An instalment credited or paid on or after 1 October 2026 can use the Schedule E route regardless of the agreement date; an earlier instalment under the same agreement had to go through TAN and whatever regime then applied. A transaction that straddles the date may need both routes for its different instalments.

What happens if the buyer does not deduct TDS on the purchase from an NRI seller?

The buyer can be treated as an assessee in default under section 398 of the Income-tax Act, 2025 (the successor to section 201 of the 1961 Act) for the tax not deducted, with interest running on the shortfall. This notification changes only how a buyer who does deduct reports and pays the tax; the underlying obligation to deduct under section 393(2) is unaffected and never depended on holding a TAN.

TDS on property bought from an NRI: TAN no longer required

In short

From 1 October 2026, a resident individual or Hindu undivided family who deducts tax under section 393(2) [Table: Sl. No. 17] of the Income-tax Act, 2025 on buying immovable property from a non-resident no longer needs a TAN. The Income-tax (Fifth Amendment) Rules, 2026 (Notification No. 121/2026, G.S.R. 830(E), dated 22 September 2026) insert a new Schedule E into Form No. 141, the PAN-based challan-cum-statement already used for resident-to-resident purchases under section 393(1) [Table: Sl. No. 3(i)], and amend rules 215, 218 and 219 so the buyer files one PAN-based statement instead of registering for a TAN and filing the quarterly statement now called Form No. 144. There is still no ₹50 lakh threshold for a non-resident seller; deduction remains due on the first rupee, at the rates in force.

A resident who buys a flat from a relative settled abroad has, until now, had to do something no other one-off property buyer has to do: register for a Tax Deduction Account Number, deduct tax under section 393(2) of the Income-tax Act, 2025 on the entire sale consideration, and file a quarterly TDS statement, for a transaction that will very likely never recur. A buyer purchasing the identical flat from a resident seller does none of this — section 393(1) already lets that buyer pay the tax and report it on a single PAN-based form.

The Income-tax (Fifth Amendment) Rules, 2026, notified 22 September 2026 and effective 1 October 2026, close that gap. They do not touch the obligation to deduct tax; they change only how a resident individual or HUF buying from a non-resident complies with it.

Key points

From 1 October 2026, a resident individual or HUF deducting tax under section 393(2) [Table: Sl. No. 17] of the Income-tax Act, 2025 on buying immovable property from a non-resident no longer needs a TAN (Notification No. 121/2026, G.S.R. 830(E), 22 September 2026).
The mechanism is a new Schedule E in Form No. 141, the PAN-based statement already used for a resident-to-resident purchase under section 393(1) [Table: Sl. No. 3(i)], with amendments to rules 215(1), 218(3), 219(5) and Form No. 132.
There is still no ₹50 lakh threshold for a non-resident seller — that applies only under section 393(1) [Table: Sl. No. 3(i)]. Deduction under Sl. No. 17 to section 393(2) is on the first rupee, at the rates in force.
Because the buyer usually cannot know the seller’s real capital gain, deduction on the gross consideration remains the default; sections 395(1) and 395(2) let the seller or the buyer apply for a lower-rate certificate or a determination of the taxable proportion.
The change is procedural, not substantive: it governs how tax already payable under section 393(2) is reported, keyed to the date of credit or payment, not the sale agreement’s date.

Why did a TAN cost so much in the first place, and what changed?

Because section 393(2) [Table: Sl. No. 17] of the Income-tax Act, 2025 — the successor to section 195(1) of the 1961 Act — requires deduction on “any interest … or any other sum chargeable under the provisions of this Act, not being income chargeable under the head ‘Salaries’,” paid to a non-resident, with no threshold, unlike the ₹50 lakh floor for a resident seller under Sl. No. 3(i). Every prior route into that obligation for a first-time deductor ran through TAN registration under section 203A of the 1961 Act and a quarterly statement — Form 27Q, renumbered Form No. 144. A resident buying from a resident never had that problem: section 194-IA, now section 393(1) [Table: Sl. No. 3(i)], already let that buyer pay the 1 per cent deduction on a single PAN-based challan-cum-statement — Form 26QB, now folded into Form No. 141 — without ever registering for a TAN.

The amendment extends that route to the non-resident-seller case, only for a resident individual or HUF buyer, only for immovable property, from 1 October 2026. It inserts a second limb into serial number 3 of the Table to rule 215(1) — deduction under section 393(2) [Table: Sl. No. 17], alongside the existing section 393(1) categories — adds a matching clause (e) to rules 218(3) and 219(5), and inserts Schedule E into Form No. 141. Form No. 132, the certificate given to the seller (successor to Forms 16B–16E), gains a matching checkbox and now cross-refers to Form No. 141.

What does Schedule E to Form No. 141 ask for?

Schedule E field	What it captures
Property	Address; type of property
Buyers	PAN, name, share of consideration, totalling 100%
Sellers	PAN if available, name, status code, contact, email, foreign address, TRC and TIN, share
Dates and value	Agreement and registration dates; stamp duty value; sale consideration
Payment	Lumpsum or instalment details
Per seller	Long-term/short-term gain; amount liable to TDS; rate; certificate under s.395(1)/(2), if any; tax deducted; date

Note 6 makes the seller’s contact number, email and foreign address mandatory whether or not the PAN is available, tying a missing PAN to the higher-rate safeguard in rule 217.

A worked example: purchase completed on 8 October 2026

Suppose Mr. Shah agrees on 20 September 2026 to buy a flat in Ahmedabad from his non-resident uncle for ₹95 lakh (stamp duty value ₹90 lakh), payable in full on registration. The dates and the rate below are illustrative; the statute’s computations are not.

20 September 2026

Agreement signed. Had the full consideration been paid on this date, section 393(2) [Table: Sl. No. 17] would already have applied, but only through the pre-amendment route: TAN and Form No. 144.

8 October 2026

Registration and payment. Consideration is credited or paid — the trigger under section 393(2)(b) — after the Rules took effect on 1 October. Mr. Shah deducts tax at an illustrative 12.5 per cent (before surcharge and cess) of ₹95 lakh, no certificate having been obtained: ₹11,87,500. No TAN application is needed.

30 November 2026

Form No. 141 with Schedule E filed. Due within 30 days from the end of the month of deduction (rules 218–219) — one PAN-based filing for this transaction, with no quarterly statement to follow.

15 December 2026

Form No. 132 issued to the seller. Due 15 days after the Form No. 141 due date, giving the uncle proof of the tax deducted.

Before and after: what the buyer actually had to do

Step	Before 1 October 2026	From 1 October 2026
Registration	TAN, for this one transaction	None — PAN suffices
Payment	General TAN-based challan	Form No. 141, PAN-based
Statement	Quarterly, Form 27Q / Form No. 144	One statement, Schedule E
Certificate to seller	Form 16A	Form No. 132
Deduction obligation	Section 393(2) [Sl. No. 17], gross consideration, no threshold	Unchanged

Does this apply to an agreement signed before 1 October 2026?

Only to the extent consideration is credited or paid on or after that date, since deduction under Sl. No. 17 to section 393(2) is triggered by the earlier of the two, not the agreement date. An instalment paid before 1 October 2026 stays under the regime that then applied; a later instalment can use Schedule E. A separate, larger transition sits above this: consideration credited or paid before 1 April 2026 falls under section 195 of the 1961 Act altogether, since the 2025 Act governs only tax years beginning on or after that date.

What if the buyer does not deduct at all?

Nothing in this notification touches that question. A resident buyer who fails to deduct under section 393(2) can still be treated as an assessee in default under section 398 of the Income-tax Act, 2025 — the successor to section 201 of the 1961 Act — with interest on the shortfall. The wider cross-border TDS questions that arise whenever a non-resident is on the other side of a transaction are a separate subject, touched on in Slump sale taxation: section 50B and the section 77 overlay in the context of a business transfer. This amendment removes only the TAN and quarterly-statement route for a buyer who does comply; the obligation to deduct is unaffected.

What does this mean in practice?

A resident buyer closing on or after 1 October 2026 should not open a TAN case — Form No. 141 with Schedule E is the only filing needed. Because deduction is still on the gross consideration by default, a seller wanting tax deducted only on the real gain should apply under section 395(1) before closing, and a buyer facing an uncertain gain component should consider section 395(2). Where payments straddle 1 October 2026, track each instalment against its own date of credit or payment — the compliance route, not the rate or the obligation, differs on either side.

Provisions cited are the Income-tax Act, 2025 and the Income-tax Rules, 2026 as amended by the Income-tax (Fifth Amendment) Rules, 2026, and the Income-tax Act, 1961, read in September 2026. incometaxindia.gov.in refused this note’s research tools, so the statutory text was read on indiankanoon.org, which mirrors the bare Act, and cross-checked against the notification; a reader with ordinary browser access may prefer the incometaxindia.gov.in copies of the same sections. Section 395(6), inserted by the Finance Act 2026 for an electronic application before a prescribed income-tax authority, is stated only as referenced in the notification; its text was not independently located on a primary source here. Income-tax Act, 2025: section 393, section 393(1), section 393(2), section 395, section 398. Income-tax Act, 1961: section 195, section 197, section 201. Notification: Notification No. 121/2026, G.S.R. 830(E), dated 22 September 2026 (Income-tax (Fifth Amendment) Rules, 2026).

Section 393TDS on immovable propertyNon-residentTANIncome-tax Act 2025Real estate

This note is general commentary on the law as at 25 September 2026 and is not advice on any matter. The position in a particular case depends on its own facts.

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