New TDS Framework for Purchase of Property from NRIs

Key Highlights of the New TDS Framework For NRI Purchases

1. No TAN Requirement for Eligible Buyers
   Resident Individuals and Hindu Undivided Families purchasing immovable property from a non-resident can comply with TDS provisions using their existing PAN, eliminating the need to obtain a separate TAN for such transactions.
2. Dedicated Reporting Through Form 141 (Schedule E)
   A new Schedule E has been introduced in Form No. 141 (Challan-cum-Statement) specifically for reporting TDS on property purchases from non-resident sellers. This creates a streamlined and transaction-specific reporting mechanism.
3. Mandatory TDS Certificate
   After depositing the tax, the buyer is required to issue Form No. 132 as the TDS certificate to the non-resident seller.
4. No Change in TDS Rates
   The notification introduces procedural simplification only. The applicable TDS rates, including rates based on long-term or short-term capital gains along with surcharge and cess, remain unchanged.
5. Dedicated TDS Provision : New Section 393(2) specifically covers consideration paid by a resident Individual or HUF for transfer of immovable property by a non-resident.
6. Separate Compliance for Joint Buyers
   Where a property is purchased jointly, each buyer is required to file a separate Form No. 141 and comply independently as a deductor.
7. 30-Day Compliance Timeline
   The TDS must be deposited and Form No. 141 filed within 30 days from the end of the month in which tax is deducted. Form 141 Expanded : Form No. 141 (Challan-cum-Statement) has been amended to include transactions covered u/s 393(2).
8. Enhanced Non-Resident Seller Reporting
   Schedule E requires detailed disclosures relating to the non-resident seller, including foreign address, contact details, Tax Residency Certificate (TRC), Tax Identification Number (TIN), seller-wise consideration, and instalment-wise TDS computation.
9. Applicability from 1 October 2026
   The new framework applies to transactions covered under Section 393(2) with effect from 1 October 2026.
10. Regular TAN-Based Process Continues for Others
    Companies, LLPs, partnership firms, trusts, and non-resident buyers acquiring property from an NRI seller must continue to follow the regular TAN-based TDS compliance and quarterly statement filing provisions.
11. Objective of the Amendment
    The new framework simplifies compliance for resident Individuals and HUFs while ensuring comprehensive reporting of cross-border property transactions and facilitating accurate TDS collection.