NRI property purchase: 4 TDS and PAN changes buyers must know from October 1

From October 1, 2026, a resident Indian buying immovable property from an NRI will no longer need to obtain a TAN just to deduct TDS on the transaction. Instead, the buyer will use their PAN in the revised Form 141-cum-challan. The change is intended to reduce paperwork and make one-time property purchases from non- resident sellers easier to comply with.

Until September 30, resident individuals and HUFs buying property from NRIs had to obtain a TAN to deduct TDS. The process could take around seven to 10 days and created an additional compliance burden for a transaction that may happen only once. From October 1, the buyer can quote PAN instead, bringing the process closer to the framework used for domestic property transactions.

The transaction will now be reported through Schedule E of Form 141. Buyers will deposit the TDS and report the property transaction through this form, while the TDS certificate will be issued in Form 132. If there is more than one buyer, each buyer must file a separate form. The revised process removes the earlier TAN-based requirement for this transaction.

The simplified process comes with additional information requirements. From October 1, buyers must provide the NRI seller’s contact number, email ID and overseas address. These details will need to be reported as part of the transaction compliance. Buyers should therefore collect the required information from the seller before completing the property purchase and TDS formalities.

If the NRI seller does not have a PAN, the buyer will need to provide the seller’s Tax Residency Certificate (TRC) number and Tax Identification Number (TIN). The source notes that without these details, TDS will be deducted at a higher rate. Buyers should therefore check the seller’s tax documents before completing the transaction to avoid an unexpected higher TDS deduction.

The earlier process required buyers to deal with additional compliance, including quarterly TDS returns and issuing a TDS certificate. The revised framework removes the TAN requirement for resident individuals and HUFs making these purchases.

Experts cited in the source say the new process brings compliance more in line with that applicable to domestic property transactions.

The change addresses a practical problem for buyers who may purchase property from an NRI only once. Earlier, obtaining a TAN solely for the transaction added time and paperwork, with the online application taking around seven to 10 days. The new PAN-based process is intended to reduce this burden while retaining the requirement to deduct and report TDS correctly.

From October 1, buyers should remember four key points: no TAN is required for this purpose; PAN must be quoted in Form 141; Schedule E must be used to report the transaction; and seller details such as contact information and overseas address must be provided. If the seller has no PAN, obtain the TRC number and TIN to avoid higher TDS.