The Central Board of Direct Taxes (CBDT) has notified the Income-tax (Fifth Amendment) Rules, 2026, introducing changes to the Income-tax Rules, 2026, particularly in relation to tax deducted at source (TDS) on immovable property transactions.
The notification was issued by the Ministry of Finance, Department of Revenue, on September 22, 2026 and the amended rules will come into force from October 1, 2026.
The changes are important for taxpayers, property buyers, sellers and tax professionals handling TDS compliance for property transfers.
TDS Rules for Immovable Property Transactions Updated
Under the amended rules, Section 393(2) of the Income-tax Act, 2025 has been specifically incorporated into the relevant TDS compliance provisions.
The notification provides for TDS in transactions involving the transfer of immovable property where a resident individual or Hindu Undivided Family (HUF) is required to deduct tax on the consideration paid or credited for the property.
This change has also been reflected in the prescribed forms used for reporting TDS.
Form 141 Gets Major Update
One of the key changes is the amendment to Form No. 141, which is used for furnishing challan-cum-statements relating to TDS.
The heading of Form 141 has now been expanded to cover deductions under both Section 393(1) and Section 393(2).
More importantly, a new Schedule E has been inserted into Form 141 for reporting TDS relating to consideration paid for the transfer of immovable property covered under Section 393(2).
What Details Will Schedule E Capture?
The newly introduced Schedule E requires detailed information about the property transaction.
Among other things, taxpayers will need to provide:
- Address of the immovable property
- Type of property, such as land or building
- Details of all buyers
- PAN and names of buyers
- Proportion of sale consideration payable by each buyer
- Details of all sellers or deductees
- Seller's PAN, where available
- Seller's residential status
- Contact details and email ID
- Overseas address in case of a non-resident seller
- Tax Residency Certificate details, where applicable
- Tax Identification Number of the non-resident seller
- Agreement and registration dates
- Stamp duty value of the property
- Total sale consideration
- Details of whether payment is made in lump sum or instalments
The form also requires transaction-level details, including the amount on which TDS is applicable, the TDS rate, amount deducted and date of deduction.
Additional Compliance for Non-Resident Sellers
The notification also specifies additional information requirements where the seller or deductee is a non-resident .
The contact number, email ID and address in the country or specified territory where the deductee is resident must be provided, irrespective of whether the non-resident has a PAN.
Where PAN is not available, specified identification details are required under Rule 217 to help ensure that tax is not deducted at a higher rate.
The form also provides for reporting the seller's tax residency certificate and tax identification number, where applicable.
Form 132 Also Updated
The CBDT has also amended Form 132 to include transactions involving the transfer of immovable property by a non-resident to a resident individual or HUF.
The updated form now includes a corresponding entry for such property transfers, while certain fields have been revised to reflect the updated reporting structure.
TDS Amount Will Include Surcharge and Cess Where Applicable
The notification clarifies that the amount of TDS reported in the relevant form will include surcharge and cess, wherever applicable.
Further, where there is more than one deductor, each deductor is required to file a separate form . The notification also states that some information in the form will be pre-filled to the extent possible.
Effective Date
The Income-tax (Fifth Amendment) Rules, 2026 will come into force from October 1, 2026.
For property buyers, sellers and tax professionals, the updated Form 141 and the new Schedule E will therefore become relevant for transactions covered by the amended TDS provisions from this date.
Key Takeaway
The latest CBDT notification expands the TDS reporting framework for specified immovable property transactions and brings corresponding changes to Forms 132 and 141.
The introduction of Schedule E in Form 141 means that property-related TDS reporting will require more granular information about the property, buyers, sellers, consideration, instalments and tax deducted.
With the changes taking effect from October 1, 2026, taxpayers and professionals handling property transactions should review the updated reporting requirements and ensure that the necessary transaction and taxpayer details are available for compliance.
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