Big change for NRIs in Budget 2026: Simplification in property sale transactions

TDS on sale of immovable property by a non resident is proposed to be deducted and deposited through resident buyers and his her or her pan based chalan, instead of requiring a tan, which is a temporary accounting number.

Chartered Accountant Jigar Suba said: "In the current system, TAN is required to be obtain by a Resident Individual/ HUF whereby he purchases immovable property from a Non-resident. This requirement of obtaining has been removed. This is a welcoming change, since the TAN has no alternative use, except for this single transaction. Now, the buyers will deduct and deposit tax using PAN. Note that these provisions are applicable from 1st October, 2026. This will reduce the overall cycle time for completion of sale deal and registering the sale deed, providing a relief to Non- Resident Sellers."

Simplifying Property-Related Compliance

TAN for property transactions involving NRIs will be replaced with resident buyer’s PAN based challan

Relaxation from requirement to obtain tax deduction and collection account number (TAN) by a resident individual or HUF, where the seller of the immovable property is a non -resident Section 397(1)(a) of the Act provides that every person, deducting or collecting tax shall apply to the Assessing Officer for the allotment of a "tax deduction and collection account number" (TAN). Clause (c) of the said sub-section provides for cases where a person is not required to obtain TAN.


Presently, if a person buys an immovable property from a resident seller, the person is not required to obtain (TAN) to deduct tax at source.

However, where the seller of the immovable property is a non-resident, the buyer is required to obtain TAN to deduct tax at source. This creates an unnecessary compliance burden for the buyer, as he would need TAN for a single transaction.

In order to reduce compliance burden for the resident individual and Hindu undivided family, Budget 2026 proposed to amend section 397(1)(c) of the Act to provide that resident individual or Hindu undivided family, is not required to obtain TAN to deduct tax at source in respect of any consideration on transfer of any immovable property under section 393(2).

The amendment will take effect from the 1st day of October, 2026.