Property Purchase From NRIs Gets Easier as Government Amends Form 141; Check How It Helps

Government Simplifies TDS Compliance for NRI Property Purchases

The Central Board of Direct Taxes (CBDT) has amended the Income-tax Rules, 2026 to simplify the tax compliance process for resident individuals and HUFs buying immovable property from non-resident sellers.

The changes were notified through the Income-tax (Fifth Amendment) Rules, 2026, dated September 22, 2026. The revised framework will come into effect from October 1, 2026. 

No Separate TAN Required From October 1

One of the key changes is the removal of the requirement for a resident individual or HUF to obtain a separate Tax Deduction and Collection Account Number (TAN) solely for TDS compliance when purchasing property from a non-resident.

Instead, eligible buyers can use a PAN-based mechanism to deposit and report the TDS through the amended Form 141. This is intended to reduce the procedural burden associated with property transactions involving NRI sellers. 

New Schedule E Added to Form 141

The amended Form 141 now includes a dedicated Schedule E for TDS on the purchase of immovable property from a non-resident.

The schedule requires detailed transaction information, including:

• Property address and type

• Names and PAN details of buyers

• Details of the non-resident seller

• Sale consideration

• Stamp duty value

• Agreement and registration dates

• Payment and instalment details

• Applicable TDS rate

• TDS amount deducted

• Seller's residential and tax residency information 

What If the NRI Seller Does Not Have a PAN?

The amended process also provides for situations where the non-resident seller does not have a PAN.

In such cases, the buyer may need to provide specified information relating to the seller's overseas tax status, including the Tax Residency Certificate (TRC) details and foreign Tax Identification Number (TIN), where applicable. The seller's overseas address and contact information are also required. 

TDS Still Has to Be Deducted

The simplification does not remove the underlying TDS obligation.

The buyer still has to deduct the applicable TDS from the payment to the non-resident seller and correctly report and deposit the amount. The amendment mainly changes the mechanism through which the tax is deposited and reported. 

Form 141 and Form 132

Under the revised process, the buyer has to deposit the TDS and file Form 141 within the prescribed timeline. The new Schedule E captures the details required for the transaction.

After filing Form 141, the buyer must also furnish Form 132, which serves as the TDS certificate for the non-resident seller. 

How the New Rule Helps Property Buyers

The change is particularly relevant for resident individuals and HUFs involved in property transactions with NRIs.

Previously, obtaining and using a TAN added another compliance step for buyers. From October 1, the PAN-based mechanism is expected to make the process more straightforward while still requiring detailed reporting of the transaction and seller's tax information. 

Buyers Must Collect NRI Seller Details

Although the TAN requirement has been removed, buyers still have significant reporting responsibilities.

Before completing the transaction, buyers should ensure that they have the necessary information from the non-resident seller, including overseas address, contact information and relevant tax residency details. This information may be needed to correctly complete the new Schedule E in Form 141. 

When Will the New Rules Apply?

The amended provisions will apply from October 1, 2026. The changes specifically cover resident individuals and HUFs who are required to deduct TDS when purchasing immovable property from non-resident sellers under the applicable provisions of the Income-tax Act, 2025. 

Key Takeaway

The amendment shifts NRI property-purchase TDS compliance from a TAN-based process to a PAN-based reporting mechanism through Form 141. While this removes a separate TAN requirement for eligible resident buyers and HUFs, buyers must continue to deduct the applicable TDS and provide detailed information about the property, buyers, sellers and tax calculation.