Major TDS Update on Property Purchases (Effective October 1, 2026)
- Removal of TAN Requirement for NRI Transactions: Previously, if a resident individual or Hindu Undivided Family (HUF) bought property from a Non-Resident Indian (NRI), they were unnecessarily required to obtain a Tax Deduction and Collection Account Number (TAN) solely to deposit the TDS. Starting October 1, 2026, this requirement is removed, allowing buyers to complete the process using their PAN.
- New Portal Chalan/Schedule Integration:
- The income tax portal (
income tax.gov.in) has introduced updates to Form 141 under the e-pay tax section. - A new category under Schedule E is being added specifically for transactions involving property transfers from non-resident sellers.
- Once active, buyers can easily deduct and deposit TDS using their own PAN without needing a TAN.
- The income tax portal (
- Required Details for Filing:
- Property Details: Address and type of property (land, building, or both).
- Buyer Details: Name, PAN, and proportionate share (if there are multiple buyers, separate forms must be filled for each).
- Seller (NRI) Details: PAN (if available), Name, status, contact details, email address, and residential country address. If the seller does not have a PAN, a Tax Residency Certificate (TRC) number or Tax Identification Number (TIN) becomes mandatory.
- Transaction Details: Agreement date, registry date, stamp duty value, total sale consideration, and installment details (if applicable).
- TDS Rate Considerations:
- Unlike transactions with a resident seller (where the standard TDS rate is typically 1%), property purchases from an NRI require calculating TDS based on whether the capital gains are long-term or short-term, along with applicable surcharges and education cess (or based on any lower deduction certificate obtained by the seller).
