From 1st October 2026, the income tax department has changed the TDS compliance process for the purchase of immovable property from non-resident sellers.
TDS Rules for Property Purchase From NRI
Under the new rule, Resident individuals or Hindu Undivided Families (HUFs) buying Indian immovable property from non-resident sellers can now report and pay TDS using their Permanent Account Number (PAN) instead of obtaining a Tax Deduction and Collection Account Number (TAN).
Earlier, when a Resident individuals or HUFs purchase a house/ flat/ land in India from non-resident sellers, resident individuals in this situation had to obtain a TAN to deduct and deposit TDS.
But, from 1st October 2026, no need to obtain TAN only for TDS deduction, buyers can use his PAN for TDS compliance.
Who are Eligible to Use PAN Instead of TAN for Property TDS?
PAN-based reporting facility available
- Resident individual buying property from an NRI
- Resident HUF buying property from an NRI
PAN-based relief not available
- Company buying property from an NRI
- Firm buying property from an NRI
They are still required to obtain a TAN for TDS compliance when purchasing property from non-resident sellers.
Does ₹50 Lakh Threshold Apply to Property Purchased From an NRI?
The threshold ₹50 lakh and 1% TDS rate are not applicable in transactions where the seller is a non-resident, this rule is only applicable when the seller is resident individual.
TDS Rates in Case of Non-Resident Seller
| Particulars | If Long-Term Capital Gains | If Short-Term Capital Gains |
| Holding period | More than 24 months | 24 months or less |
| Tax rate | 12.5% | Applicable slab rate, up to 30% |
| Surcharge | May apply | May apply |
| Health and Education Cess | May apply | May apply |
New Reporting Framework in Case of Non-Resident Seller
| Particulars | New reporting system |
| Property TDS form | Form 141 for applicable transactions |
| TDS account requirement for eligible buyers | PAN-based reporting facility |
| Reporting method | Consolidated reporting through Form 141 for applicable categories |
Explore in Details - Form 141: Applicability, Due Dates, Filing Process
Conclusion
From 1 October 2026, eligible resident individuals and HUFs purchasing immovable property in India from non-resident sellers must use PAN-based reporting instead of obtaining a TAN under the new procedure described.
However, the TDS obligation remains unchanged. Buyers must determine the applicable TDS rate, deduct and deposit the tax, and submit the prescribed Form 141 known as the "Challan-cum-Statement of Deduction of Tax." This replaces multiple earlier forms, streamlining the TDS reporting process.
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